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The purpose of this paper is to examine which value capture strategies are efficient in the invention stage and commercialization stage for small and medium enterprises (SMEs).

According to the characteristic of four primary value capture strategies, the authors categorized the formal-oriented strategy (patent), informal-oriented strategies (secrecy, lead-time), mix strategies (both formal and informal strategies), and whether to invest in complementary assets. In order to assess R & D productivity based on value capture strategy, this paper applied the two-stage data envelopment analysis for data collected from Korea Innovation Survey 2010. The sample was made up of 640 SMEs in manufacturing industry.

The results suggest that informal strategy (secrecy, lead-time) is efficient in the invention stage. Furthermore, mixed use of formal (patent) and informal strategies results in higher productivity in the commercialization stage. Lastly, the results suggest that productivity may vary depending on the investment in complementary assets. Whereas the investment in complementary assets may reduce R & D productivity at the invention stage, it may increase the productivity at the subsequent commercialization stage.

This paper did not consider external conditions such as institutional environment, industry characteristics and complexity of technology, as possible factors affecting their firm performance that need future studies.

For practitioners, the results seem to stress that should be good at combining value capture strategies in order to capture financial performance from the invention.

This study is a novel attempt to analyze R & D productivity in terms of each value capture strategy throughout the two stages: invention stage; commercialization stage.