On the contingent value of knowledge base for radical innovation capability The moderating effect of appropriability regimes

Purpose This paper aims to explore how to build firm's radical innovation capability from its own knowledge resources. It proposes the impact of knowledge base on radical innovation and outlines why and how appropriability regimes are important throughout the radical innovation capability development process. Design/methodology/approach Questionnaire and in-depth interviews were used to empirically test the relationship between knowledge base, appropriability regimes and radical innovation capability. To correct for potential endogeneity, a two-stage regression model was used to test the interaction effects Findings By examining 237 firms involved in R&D activities in high-tech manufacturing firms in China, this paper finds that when a firm have a deep knowledge base, strategic appropriability regime may reduce concerns about problems such as knowledge leakage and innovation appropriation associated with deep knowledge bases. In contrast, legal appropriability regime will also tend to strengthen the positive effect of knowledge breadth on radical innovation capability. Originality/value This paper provides a more nuanced understanding of how knowledge base and value appropriability mechanisms jointly affect radical innovation capability development.