How formal and informal intellectual property protection matters for firms' decision to engage in coopetition: The role of environmental dynamism and competition intensity

Firms engage in coopetition by collaborating with their direct competitors. We examine how reliance on protection mechanisms to safeguard intellectual property (IP) affects a firm's decision to engage in coopetition. In addition, we study how industry dynamism and competitive intensity moderate this relationship. Using a generalized structural equation model (GSEM), we find that firms are more likely to collaborate with rivals when their IP is protected. Firms employing formal protection mechanisms are more likely to engage in coopetition if they operate in a dynamic industry and they are less prone to engage in coopetition when using informal protection mechanisms in dynamic and competitive industries. We conjecture that this latter finding signals that firms employing informal mechanisms in such environments are more likely to prevent knowledge spillovers to a competitor by avoiding them as partnership candidates. •Firms use intellectual property protection to manage coopetition tensions.•Firms are more likely to coopete when their intellectual property is protected.•In dynamic industries, using formal protection increases propensity to coopete.•In competitive industries, using informal protection reduces propensity to coopete.•Firms using informal protection are less prone to coopete in dynamic industries.