FIRM-SPECIFIC INNOVATIONS AND RENT APPROPRIATION: TESTS OF CONTINGENCIES.

We argue that the firm-specificity of a firm's innovations can function as an effective isolating mechanism that helps the firm appropriate innovation rents. But there are some key boundary conditions that influence the extent to which a firm can benefit from its firm-specific innovations. Based on patent citation data of U.S. manufacturing firms, we show how environmental dynamism and technological diversity moderate the effects of firm-specificity in innovations on firm value generation.