Improving new technology venture performance under direct and indirect network externality conditions

Ksenia Podoynitsyna, Michael Song, Hans van der Bij and Mathieu Weggeman

Journal of Business Venturing, 2013, vol. 28, issue 2, 195-210

Abstract: This study compares the effectiveness of five responses to external uncertainty in markets with network externalities: avoidance, imitation, control, cooperation, and real options reasoning as a form of strategic flexibility. Our analysis of 385 new technology ventures shows that direct and indirect network externalities have opposite effects on the effectiveness of these strategies. Moreover, under network externalities, attempts to make ventures less dependent upon environmental instabilities perform differently compared to attempts to control the environment. Finally, we show that real options reasoning does not always perform better under conditions of higher uncertainty, such as uncertainty due to direct network externalities.

Keywords: Direct and indirect network externality effects; Flexibility; Real options; Uncertainty management strategies; New technology ventures (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0883902612000651
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:28:y:2013:i:2:p:195-210

DOI: 10.1016/j.jbusvent.2012.04.004

Access Statistics for this article

Journal of Business Venturing is currently edited by S. Venkataraman

More articles in Journal of Business Venturing from Elsevier
Bibliographic data for series maintained by Catherine Liu ().