Abstract This study investigates the extent to which the breadth of appropriability mechanisms employed, along with the impact of external appropriability conditions, influences the openness of young innovative firms. More specifically, we use principal components analysis to derive four measures of external appropriability conditions—competitive pressure, innovation pressure, operational barriers, and IP barriers. We analyze how these conditions—along with the firm’s breadth of appropriability mechanisms—associate with two forms of firm-level openness. We use cross-sectional survey data on 3476 young innovative firms across ten European countries. Our study makes four important contributions. First, we confirm existing findings concerning the appropriability–openness paradox, while extending it to young innovative firms. Second, we provide new results differentiating between the effects of external appropriability conditions on two measures of openness: breadth of external search and collaboration depth. Third, we find novel evidence regarding the positive relationship between one type of external appropriability conditions—institutional barriers—and openness in young innovative firms. Fourth, we show a positive moderating effect of the severity of institutional barriers on the association between breadth of appropriability mechanisms and openness, i.e., more severe barriers lead to higher openness per unit of breadth.
Elzoumor et al. (Fri,) studied this question.