Triple Impact: Exploring the interplay of appropriability and loose appropriability regime on economic performance

This study examines the influence of firms' joint combination of appropriability strategies on economic performance in response to loose appropriability regime conditions. Drawing on the exogenous perception of loose appropriability regimes in the context of service innovations, we propose that simultaneously deploying formal and informal appropriability strategies enables firms to effectively secure intellectual property and maximize value appropriation, thereby enhancing their economic performance. Importantly, we further argue that the firms’ perception of loose appropriability regimes significantly amplifies this combined effect. Using an original large-scale survey of 300 Knowledge-Intensive Business Service firms (KIBS) in Taiwan, we confirm the presence of this three-way interaction effect. Our findings demonstrate that KIBS firms leveraging the joint combination of formal and informal appropriability mechanisms experience significant improvements in economic performance. Specifically, this positive impact is further amplified when firms actively perceive and respond to loose appropriability regimes⎼ resulting in an increase of approximately 19 % in new product sale share returns. Finally, by integrating both exogenous and endogenous perspectives from appropriability literature, we conclude that KIBS firms employing the joint combination of appropriability strategies significantly achieve greater economic performance, contingent on their perception of loose appropriability regimes. We thus highlight the critical role of firm-specific perceptions of external conditions in determining the effectiveness of appropriability strategies.