How Far Will They Go? Intellectual Property and the Range of Market Participation by Nascent Firms
How Far Will They Go? Intellectual Property and the Range of Market Participation by Nascent Firms

Summary/Abstract: This paper considers whether nascent firms that have a competitive strategy in intellectual property (IP) have a greater likelihood of servicing markets that are geographically farther in distance. Unlike the born-global literature that identifies characteristics that impact a nascent firm’s choice to service the home market versus foreign markets, this paper applies an ordinal approach to market range that differentiates between distances within the domestic market as well as abroad. Given that domestic IP provides national protection to firms, we posit that the firms which exploit this competitive advantage in IP are likely to service the national market, rather than just local or regional markets. Overall, empirical evidence overwhelmingly suggests that when IP protection is a critical element to the competitive strategy of a nascent firm, that firm has a greater likelihood of selling to consumers in markets that are geographically farther in distance.

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