In this paper we explain how firms seeking to take advantage of distributed innovation and outsourcing can bridge the tension between value creation and value capture by modifying the modular structure of their technical systems. Specifically, we introduce the concept of “IP modularity”, a...

Modularity is a means of partitioning technical knowledge about a product or process. When state-sanctioned intellectual property rights are ineffective or costly to enforce, modularity can be used to hide information and thus protect intellectual property (IP). We investigate the impact of...

Efficient markets for technology are essential for innovative industries. A determinant of their efficiency hitherto neglected is the separation in the licensing process of technical knowledge from the intellectual property rights that cover it. I study this question in the context of the...