Overlap in external technology search locations and the breadth of IPR assets: lessons from the Security Software Industry

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Abstract

This study examines the effect of intellectual property rights (IPR) on firms’ geographic overlap strategy of external technology search (ETS) compared to rivals. I reveal that firms are able to realise less intensity of geographic overlap in ETS locations compared to competitors and that this outcome is a function of the breadth of their upstream (generality of patents) and downstream (diversification of trademarks) IPR tools. Accordingly, I conclude that both covariates influence the spatial isolation of ETS vis-à-vis competitors. The effect of generality of patents on isolation, however, is more pronounced in comparison with diversification of trademarks at strategic technology alliances, meanwhile the reverse scenario is true at acquisitions. I also reveal relevant findings about resource-rich organisations defined as those with the broadest portfolio of such up- and downstream IPR assets within the industry.