Which is the most effective innovation protection method for different types of product innovation?Evidence from South Korean manufacturing firms

Abstract

Securing appropriation is crucial for firms to retain their competitive advantage. This article empirically examines the effects of different types of innovation protection methods on different types of product innovation. The study considers six types of innovation protection methods which can be used during product development: patents, a utility model, designs, confidentiality, complex designs, and market preoccupation. Four types of product innovation are considered: product quality improvements, product cost reductions, product diversification, and pioneering a new market. The main findings are as follows: (1) Patents have a positive effect on pioneering a new market compared to other product innovation types. This result means that patents are effective for product innovations with completely novel characteristics. (2) Market preoccupation is most effective for improving quality, reducing costs, and enhancing product diversification compared to other innovation protection methods.