The paradox of openness revisited: Collaborative innovation and patenting by UK innovators
Ashish Arora, Suma Athreye & Can Huang
#2015-031
We revisit the "paradox of openness" in the literature which consists of
two conflicting views on the link between patenting and open
innovation-the spillover prevention and the organisational openness
views. We use the data from the Survey of Innovation and Patent Use and
the Community Innovation Survey (CIS6) in the UK to assess the empirical
support for the distinct predictions of these theories. We argue that
both patenting and external sourcing (openness) are jointly-determined
decisions made by firms. Their relationship is contingent upon whether
the firms are technically superior to their rivals and lead in the
market or not. Leading firms are more vulnerable to unintended knowledge
spillovers during collaboration as compared to followers, and
consequently, the increase in patenting due to openness is higher for
leaders than for followers. We develop a simple framework that allows us
to formally derive the empirical implications of this hypothesis and
test it by estimating whether the reduced form relationship between
patenting and collaboration is stronger for leaders than for followers.
JEL Classification: O32, O34
Keywords: open innovation, patent use, patent, external knowledge
source, community innovation survey