10.5465/AMBPP.2019.254 SHARING IS CARING: OUTBOUND OPEN INNOVATION AND THE SUBSEQUENT INNOVATION PROCESS ARAKSYA AYVAZYAN Universidad Carlos III de Madrid Calle Madrid, 126, 28903 Getafe, Madrid, Spain SAID MATR Universidad Carlos III de Madrid ABSTRACT We focus on a setting of a purely outbound open innovation model, where a firm explicitly waives the exclusivity rights of its intellectual assets. We introduce a novel explanation for such a decision, benefits from markets for technology, and explore the consequences on innovation in the liberated technological areas. INTRODUCTION Recently, the prevalence of open innovation has increased as a model for organizing firm’s innovation process. As emphasized by Chesbrough, Vanhaverbeke, & West (2006, p.1), “open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively”. Much of the prior work on the topic has focused on the “outside-in” knowledge flows (i.e. “inbound open innovation”). Yet, practicing open innovation also implies “inside-out” knowledge flows, where the firm reveals its proprietary knowledge to the outside world (Dahlander & Gann, 2010). This practice has become increasingly popular among big players, such as IBM, Google, Tesla, Sony and many others in industries like software, semiconductors, pharmaceuticals, or automobile. The incentives for firms to waive access to their proprietary assets include creating and obtaining returns from standards and their development (West, 2003), advancing collective innovation (Levin et al., 1987), increasing the demand for their still proprietary assets that are complementary to the opened up ones (Alexy & Reitzig, 2013), or pursuing social goals (Contreras, 2015). However, the potential implications of these practices on the innovation amount and type subsequently generated, market structure, and on trading activities in markets for technology, remain underexplored. Therefore, there is a need to disentangle the effect of inside-out open innovation (i.e. outbound open innovation) 1 from outside-in open innovation, to improve the overall understanding of the phenomenon of open innovation. In this paper, we focus on a context of the so-called “non-pecuniary” outbound open innovation (Dahlander & Gann, 2010), where the firm liberates its knowledge for the public for no direct financial benefits, such as royalties or inventors’ intellectual property (IP) rights, in return for using the opened up knowledge. Specifically, we explore the consequences of the decision of a firm to donate a significant amount of its exclusive knowledge assets on the industry, in terms of innovation characteristics, market structure and the impact in the markets for technology. Besides, we study the influence on the focal firm’s innovation process and the ways it utilizes the knowledge created subsequently. By doing so, we attempt at providing a wide picture of outbound open innovation.