Ilan Boris Vertinsky

This thesis comprises three chapters with the enforcement of intellectual property rights as a central theme. The first chapter explores the effect of patent ‘thickets’ on litigation propensity. Patent thickets, involve fragmented ownership rights, which lead to the anticommons problem, and unclear property boundaries which lead to uncertainty. I distinguish between these two aspects of patent thickets and argue that an important reason for unclear claims is the increase in technological diversity associated with multi-component technologies. I develop theory that predicts that both ownership fragmentation and technological diversity have a positive causal impact on litigation propensity and that these effects are higher for small firms. Empirical analysis provides evidence for the hypotheses.In the second chapter, I examine the appropriation hazards inherent in strategic alliances. Adopting a network perspective, I develop and test a theoretical framework that predicts when knowledge appropriation is likely to occur between partners. I show that different types of embeddedness in the network (relational, structural or positional) affect the likelihood that firms will engage in knowledge appropriation and litigious behavior. I also show that, not only is the competitive environment between a firm and its partner relevant (in that firms are more likely to sue each other if they are competitors), but that the competitive environment of all firms in the network affects litigation hazard.The third chapter investigates whether small firms are at a disadvantage in seeking to enforce patents and whether an aspect of the market for innovation, the trading of patents, helps small firms to overcome difficulties in enforcement. The first part examines whether small firms are more likely to litigate their patents and whether lawsuit durations are greater than large firms, establishing that small firms do incur a disproportionately large burden of cost in protecting their intellectual property. I extend previous work in this area by considering case outcomes and differences across industries. I then examine whether traded patents by small firms to large firms are more likely to be litigated, and find that the market for innovation in the form of patent trades is associated with increased litigation.

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Much has been written over the last decade of the importance of social entrepreneurship, and the goal of this research was to determine whether social entrepreneurship was important to the success of the non-profit. This research analyzes the survey responses of 177 non-profit organizations in the United States and Canada in order to determine the influence of leadership style and entrepreneurial orientation on the effectiveness of non-profits. Organizational effectiveness was measured through the ability of the non-profit to accomplish their mission and how much financial stability they had as an organization. It was determined that a transformational leadership style has a positive influence on the ability to accomplish the mission of the organization, while transactional leadership does not influence the effectiveness of the organization. It was also determined that entrepreneurial orientation plays a significant role in the success of the organization and influences both the ability to accomplish the mission of the organization and the financial stability of the organization.

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This dissertation is composed of three essays. Its central theme is a study of the antecedents to technological innovation. Essay One examines an important relationship that has been overlooked in the literature, i.e., the impact of prior alliance relationship between firms on their current innovation performance when they become competitors. I used a comprehensive longitudinal dataset that includes information on historical alliance activities and current innovation races between firms in the U.S. pharmaceutical industry, over two decades (1985-2004). I found that the impact of prior collaborations on current competitions is a function of both the type of prior alliance relationships between firms, and the number of prior allies of different types in the current competition. Essay Two helps reconcile an ongoing debate in the literature regarding whether competition positively or negatively influences innovation. I used panel data containing innovation races from 1991 to 2004 in the U.S. pharmaceutical industry. I found that the degree of knowledge resource similarity (in both structure and amount) between the focal firm and its rivals is an important determinant of the balance between the positive and negative externalities of competition. The focal firm’s innovation was likely to suffer from competition where rivals had relatively larger amounts of knowledge resources. Such negative effect, however, can be attenuated and the net effect may turn positive, as the knowledge structure similarity between the rivals and the firm increases. While Essay One focuses on inter-firm relational capital, i.e., alliances, Essay Three focuses on the development of relational capital (i.e., trust) in the workplace, touching upon some of the fundamental conditions of innovation. I studied the antecedents to social trust in the workplace, a unique form of relational capital that draws an increasing research interest. Using two field studies conducted in Canada and China representing distinct cultures, I found that the diversity of one’s social network in the community was positively associated with one’s social trust in the workplace, in both societies, while the diversity of social network in the workplace was only positively associated with social trust in the workplace in China, and not in Canada.

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