Business and Technology Strategies and New Venture Performance: A Study of the Telecommunications Equipment Industry

Michael J. Dowling and Jeffrey E. McGee
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Michael J. Dowling: Department of Management, Terry College of Business, University of Georgia, Athens, Georgia 30602
Jeffrey E. McGee: Management Department, College of Business Administration, University of Nebraska at Omaha, Omaha, Nebraska 68182

Management Science, 1994, vol. 40, issue 12, 1663-1677

Abstract: In this paper, a set of hypotheses relating competitive and cooperative business strategies and technology strategies to new venture performance are developed. These hypotheses are tested using data collected from the Initial Public Offering (IPO) documents of a sample of 52 new ventures in the telecommunications equipment industry. This industry has experienced a great deal of technological change as computer and telephone technologies have merged allowing a variety of new ventures to successfully enter the industry. The results suggest that new ventures pursuing broad cost leadership strategies were more successful. Investments in innovation in terms of relative R&D expenditures were also related to higher performance. Finally, significant interaction effects between investments in innovation and competitive strategies and performance were found.

Keywords: technology strategy; business strategy; new ventures; performance; telecommunications industry (search for similar items in EconPapers)
Date: 1994
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