Do government R&D subsidies promote or constrain disruptive innovation in early-stage ventures? The moderating role of appropriation mechanisms

This is the authors' abstract. We don't add key points for this paper.

Governments promote R&D support as a lever for innovation, yet the evidence on whether such support yields disruptive innovation is unsettled. Prior work has explained the effects of public R&D support largely through financial additionality and signalling, which tells us little about how state support shapes the technological paths firms actually pursue. We draw on institutional theory to argue that government R&D support raises disruptive innovation by increasing technology transfer intensity, which exposes firms to varied knowledge sources and to technological alternatives they would not otherwise encounter. Whether that exposure pays off, however, depends on how firms reconcile openness with value capture. We therefore expect formal appropriation mechanisms to weaken, and informal mechanisms to strengthen, the link between technology transfer intensity and disruptive innovation. Two-wave, multi-informant data from 313 new ventures in Vietnam support these arguments. By specifying both the mechanism and its boundary conditions, the study advances research on disruptive innovation, public innovation policy and appropriation strategy.