Outbound knowledge transfer in high-tech small firms: The role of process innovation and development cost

Abstract

Innovation-related knowledge can be voluntarily transferred to other organizations for direct or indirect benefits, but firms can also suffer from involuntary transfer when their knowledge leaks and gets stolen. Despite its relevance to managers, outbound knowledge transfer has been understudied. Previous theoretical perspectives suggest that the primary reason why firms innovate—to conquer markets with product innovation or to improve internal processes with process innovation—matters for how outbound knowledge transfer takes shape. Also, higher stakes represented by innovation development cost can be expected to moderate the relationship between innovation type and outbound transfer. We analyse survey data of 176 high-tech small firms to find that, indeed, process innovations are much more likely shared voluntarily, although product innovations leak away without the firm's consent. Development cost moderates voluntary transfer: Low-cost process innovations are barely shared, reflecting a lack of adopter interest, whereas high-cost process innovations are more likely to leak away to similar levels as product innovations. Overall, high-tech small firms are more inclined to voluntary transfer their process innovations.