Using What You Know: Patented Knowledge in Incumbent Firms and Employee Entrepreneurship

Alfonso Gambardella (), Martin Ganco () and Florence Honore
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Alfonso Gambardella: Department of Management and Technology and CRIOS, Bocconi University, 20136 Milan, Italy
Martin Ganco: Strategic Management and Entrepreneurship Department, Carlson School of Management, University of Minnesota, Minneapolis, Minnesota 55455

Organization Science, 2015, vol. 26, issue 2, 456-474

Abstract: Prior studies have shown that the acquisition of relevant knowledge by employees in existing firms is associated with the creation of new firms through employee entrepreneurship. Some researchers propose that the transition to entrepreneurship may be explained by established firms undervaluing knowledge created by employees, whereas other scholars maintain that firm strategies may lead to the underutilization of knowledge. We ask the question of which of these drivers is more pronounced as an explanation of employee entrepreneurship and what technological factors matter in this relationship. Analyzing a unique data set, we find that the likelihood of employee entrepreneurship increases with the inventor’s assessment of the value of a patent for an invention developed while at the incumbent firm but dramatically decreases when the invention protected by the patent is commercialized by the firm, licensed to third parties, interdependent with other firms’ inventions protected by patents, or technologically broad. We also find that conditional on high valuation by the inventor, a matching high valuation by the firm further increases the likelihood of transitioning to entrepreneurship. In combination, we show that a situation when both the inventor and the firm consider the invention valuable but the firm ends up not commercializing the invention is more predictive of employee entrepreneurship than simple differences in assessing the value of the invention. The study refines our understanding of the drivers of entrepreneurship by underscoring the “strategic” explanation of employee entrepreneurship.

Keywords: employee entrepreneurship; patents; knowledge acquisition; knowledge valuation (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (26)

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