How Can Firms Appropriate Their Investments in Innovation Activities?

The present article tries to explain how firms appropriate their investments in innovation activities. Thereby, not only intellectual property rights, but also different informal appropriation mechanisms are analysed. The special attention is paid to interactions among various appropriation methods. For the empirical testing, a large dataset is employed. The sample of innovation active firms used in this analysis includes 2960 entities that were engaged in developing and/or implementing a product or process innovation in the years 2010–2012. The results show that firms in the sample indicate high effectiveness of informal appropriation methods while at the same time assessing formal appropriation methods as being of low effectiveness. Moreover, it appears that formal methods vary together. A similar situation holds for informal methods. The findings give evidence that the choice and effectiveness of the appropriation strategies were affected by the firm’s size, the type of innovation and the sector to which firms belonged.