Research on Markets for Inventions and Implications for R&D Allocation Strategies

Abstract

This is the unspecified version of the paper.This version of the publication may differ from the final published version. is, the trade of elements of knowledge which are 'disembodied' from individuals, organizations and products. The aims of this paper are to bring together the various streams of research in this area and discuss their major assumptions and limitations, in order to provide a comprehensive framework for understanding the phenomenon, and identify promising paths for future research. We start our review by identifying the object of market exchange -that is, an invention whose knowledge has been codified and disembodied from individuals, organizations or artifacts. We then identify those factors that enable firms to trade inventions, distinguishing between institutional-, firm-, and industry-level factors. We close our analysis of the extant literature by discussing the implications of markets for inventions for firm behavior and performance. Against this background, we highlight an important avenue for future research. A neglected implication of the development of invention markets is that firms are confronted with a wide variety of technological paths from which to choose, because the opportunity to acquire technologies on the market offers them a greater variety that can their internal R&D departments. However, the streams of research on markets for inventions and on R&D allocation strategies have been surprisingly disconnected so far. Hence, in the final section, we start to establish and explore the link between these literatures, and to identify a research agenda in this domain. Permanent repository link3

Specializing in Generality: Firm Strategies When Intermediate Markets Work

“…A leading argument in the resource-based view theory of entry and diversification is that entry into new downstream markets is the dominant option for taking advantage of a general upstream resource stock (Penrose 1959, Teece 1980, Montgomery and Wernerfelt 1988. However, an emergent literature in economics and organizational theory emphasizes the increasing importance of vertical disintegration and the emergence of intermediate markets, whereby upstream suppliers provide intermediate products and services to downstream firms (e.g., Baldwin and Clark 2000, Arora et al 2001, Jacobides and Winter 2005, Kapoor and Adner 2012, Conti et al 2013, Dushnitsky and Klueter 2017, Moeen and Agarwal 2017.…”

An Organizational Perspective on Patenting and Partnering: Unpacking Capacities to Manage Participation in Patent Pools

“…Patent pools inherently reflect situations in which firms are engaged simultaneously in two processes: licensing‐in (acquisition) and licensing‐out (sales). In licensing and open innovation contexts, scholars have attempted to explain when and how firms participate in markets for technology (Chesbrough, ; Fosfuri and Giarratana, ; Bogers et al ., ; Conti et al ., ; West et al ., ). Interestingly, the findings outline the capacity to manage licensing activities as one of the most important determinants in the decision to engage in technology markets (Ceccagnoli and Jang, ; Gambardella and Giarratana, ).…”

Markets for Technology and the Importance of Firm-Specific Search for Innovation Performance

“…Search at the firm-level implies that firms engage with a variety of partners and tailor the knowledge identification and transfer to the particular norms and conventions of various knowledge sources (Laursen, 2012). Markets for technology, though, organize the transfer of knowledge at a price and in disembodied form (Conti et al, 2013). In principle, the market for technology should be separate from the acquisition of equipment or hiring new employees and the acquired knowledge should be ready to be used by the buyer.…”

“…Markets for technology, though, separate the knowledge producer from its knowledge, i.e. the knowledge becomes disembodied so that it can be traded (Arora and Gambardella, 2010;Conti, Gambardella, and Novelli, 2013). Knowledge acquisition in that sense becomes a transaction.…”