Entry and technological performance in new technology domains: Technological opportunities, technology competition and technological relatedness

Bart Leten, Rene Belderbos and Bart Van Looy

No 540570, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: Entry and success in new technology domains (NTDs) is essential for firms’ long-term performance. We argue that firms' choices to enter NTDs and their subsequent performance in these domains are not only governed by firm–level factors but also by environmental characteristics. Entry is encouraged by the richness of opportunities for technology development, while technology competition by incumbent firms discourages entry and render entries that do take place less successful. Firms are expected to be positioned heterogeneously to recognize and capitalize on technological opportunities, depending on the presence of a related technology base. We find qualified support for these conjectures in a longitudinal analysis of entry and technological performance in NTDs by 176 R&D intensive firms. While opportunity rich technology environments attract entries by firms even if these NTDs are distal from firms’ existing technologies, firms require related technological expertise in order to exploit technological opportunities post-entry.

Keywords: Competition; entry; innovation; relatedness; technological opportunities; technology search (search for similar items in EconPapers)
Date: 2016-05
New Economics Papers: this item is included in nep-cse, nep-net, nep-sbm and nep-tid
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Published in FEB Research Report - MSI_1605

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Journal Article: Entry and Technological Performance in New Technology Domains: Technological Opportunities, Technology Competition and Technological Relatedness (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:msiper:540570

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