LAUSR

Abstract This study investigated that innovative service firms adopt complementary-in use appropriability strategies in response to loose appropriability conditions. We used two features, i.e., appropriability breadth and appropriability depth, to examine different modes of complementary-in use appropriability strategies. We categorized 307 innovative service firms using a two-stage clustering analysis to identify distinct appropriability modes. The following four appropriability modes of complementary-in use appropriability strategies are identified: (1) complementary-based appropriability mode, (2) formal-based appropriability mode, (3) informal-based appropriability mode, and (4) low-profile appropriability mode. We revealed that complementary-in use appropriability strategies under loose appropriability conditions are appropriability modes adopted by innovative service firms that vary in appropriability breadth and appropriability depth. Appropriability breadth was significantly associated with the choice of appropriability modes. In addition, we revealed that innovative service firms’ choice of the modes of complementary-in use appropriability strategies varies by the firm characteristics. Finally, policy implications for enhancing innovation protection and value appropriation in service firms and sectors are discussed.