Although Open Innovation (OI) is gaining popularity, it is still unclear which are its effects on firm performance. Focusing on joint patenting, which is a significant result of OI through inter-firm collaboration, we present an Open Innovation Impact Appraisal Model, based on the protection motivation theory, to assess its impact a firm’s expected performance proxied by stock market reactions. In particular, we argue that the firm’s perceived exposure to OI disadvantages is determined by its previous joint patenting experience with the partner. The perceived severity of these disadvantages is indicated by the size of the patent family, and the business’s capacity to manage these disadvantages is determined by corporate profitability as well as financial and fiscal institutional distance. Utilizing a sample of joint patents registered in USA, we show that prior experience with the partner has an inverse U-shaped association with expected performance. This relationship is steepened by patent family size, by the negative financial institutional distance, by the negative fiscal institutional distance, and by the firm profitability. In doing so, we contribute to the scholarly discussion of what makes OI positive for company’s performance. Additionally, we give managers and policymakers guidance on how to encourage and manage joint patenting that can be beneficial for firms.
