The Second Face of Appropriability: Generative Appropriability and Its Determinants

We distinguish between two forms of appropriability: primary appropriability— effectiveness in exploiting inventions as problem-solving mechanisms and capturing a share of their profits—and generative appropriability—effectiveness in exploiting inventions as concepts and capturing a share of the future inventions they spawn. Recognizing that generative appropriability has two components—cumulative invention and preclusion of others—we identify its key managerially manipulable determinants and discuss the implications of the construct for the literature on the resource-based view and the literature on organizational learning.