How do SMEs appropriate the value from the innovation? An empirical analysis in medium high-tech industries

Innovation is assuming increasing relevance in the actual economic context, but being able to complete the innovation process is not enough for firms if they could not appropriate the value of their investments. Since, the relationship between appropriability regimes and firm performance has not received the attention it deserves, the present paper aims to narrow this gap. To this end we used a panel regression model on secondary data related to balance sheets and patent portfolios of 559 Italian SMEs belonging to medium high-tech industries, but it showed no relationship between patent portfolios and economic and financial performance. Thus, we performed a cluster analysis on primary data collected through a survey in order to gather useful insight regarding the effect that other appropriability mechanisms might have on firm ability to profit from their innovation. Results suggest that the cluster preferring informal mechanism, in particular lead time, secrecy, skilled employees and control of distribution network, over patents registers superior performance.