Effects of Reputational Sanctions on the Competitive Imitation of Design Innovations

This study examines whether and under what conditions reputational sanctions are a strong deterrent to imitative firm behaviour. Results indicate that reputational sanctions can be an effective barrier to imitation, in particular when firms perceive a reputation for innovation to be a factor in their competitive success. Linkages between firms foster the effectiveness of this barrier to imitation, as such linkages make it relatively easy to detect imitative behaviour and to impose reputational sanctions.