The Effect of Initial Public Offering (IPO) on Open Innovation: Findings from Seoul Digital Complex (SDC)

Abstract

In order to have answered according to our major research object which states themain effect of IPO on the firm's open innovation. This paper will be the first study to investigate differences in open innovationlevels before and after companies’ IPOs through a quantitative patent analysis. Wefound that patent applications remarkably increased after IPO, especially during thethree years before and after IPO. We could find out 3 implications from this research. First, Firms choose differentopen innovation strategies between before and after of IPI. Even though firms’ patentapplication during 3 years after IPO decreased, the level of open innovation during this period increased. Maybe firms choose different open innovation strategy afterIPO normally. Second, Firms’ open innovation increase from just before 3 years ofIPO. This means that firms increase open innovation to make successful situation forIPO. If any firm wants to succeed in IPO, it has to increase open innovation. Third,open innovation strategy chosen by firms are very different according to situationssuch as belonging industries, firm’s volume, and firms’ state at the belonging market.