Perceived importance of intellectual property protection methods by Korean SMEs involved in product innovation and their value appropriation

We investigate the sectoral patterns of relationships between SMEs’ perception of the importance of intellectual property (IP) protection methods and their value appropriation from innovation in countries with weak IP rights regime. By using a Heckman selection model to analyze 1,020 Korean SMEs involved in product innovation, we find that formal IP rights have a lower contribution to appropriation than the expected level. Instead, we find some positive links between SMEs’ affirmative perception of informal means of IP protection, particularly complex design, and their appropriation in both complex and discrete sectors. We discuss IP management and policy implications for enhancing the SMEs’ value appropriation.