Latent submarket dynamics and industry evolution: lessons from the US laser industry

Bhaskarabhatla, Ajay; Klepper, Steven

doi:10.1093/icc/dtt060

Cited by 39 publications

(28 citation statements)

References 29 publications

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“…Third, our results resonate with those of Bhaskarabhatla and Klepper (2014) who argue that in the laser industry, following technological change, the emergence of an 'integrative submarket' contributed to the convergence toward a particular design of the product which catered for the preference of different types of users (Windrum, 2005) and paved the way to the industry shakeout. The main difference is that while in the case of lasers, the integrative market was an 'old' existing niche, in the LAN case it was a new market (i.e.…”

Section: Discussionsupporting

confidence: 85%

''Then Came Cisco, and the Rest is History': A 'History Friendly' Model of the Local Area Networking Industry

Fontana

Zirulia

2015

SSRN Journal

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We study the role that switching costs, compatibility, and mergers and acquisitions, play in influencing the evolution of a multi-market industry. By looking at the case of the Local Area Networking industry, we propose a 'history friendly model' to replicate its evolution during the 1990s. Our model explains how a firm can start from a dominant position in one of the existing markets and exploit switching costs and compatibility to enter a new market when it opens. Mergers and acquisitions also play an important role as the new market is pioneered by a new start-up, which is soon acquired by the dominant incumbent. As a result of the acquisition, the acquiring firm becomes leader also in the new market.

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Section: Discussionsupporting

confidence: 85%

''Then Came Cisco, and the Rest is History': A 'History Friendly' Model of the Local Area Networking Industry

Fontana

Zirulia

2015

SSRN Journal

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“…6 For Hypotheses 1-3, we retested the model using discrete-time hazard models employing a standard logistic distribution. We also repeated the tests using continuous time models, including a Cox proportional hazards model (with both Breslow and Efron approaches to handle ties) and a model with Gompertz distribution (Agarwal et al, 2004;Bayus & Agarwal, 2007;Bhaskarabhatla & Klepper, 2014;Chen et al, 2012;Fortune & Mitchell, 2012;Sarkar et al, 2006). In general, methods to deal with endogeneity are less well developed for event history models than for OLS (ordinary least squares).…”

Section: Entrants -34mentioning

confidence: 99%

Capabilities, technologies, and firm exit during industry shakeout: Evidence from the global solar photovoltaic industry

Furr

Kapoor

2017

Strategic Management Journal

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Research Summary: Explanations of entrants' survival in an emerging industry are premised on pre-entry capabilities or technology entry choices prior to the emergence of the dominant design. We consider how these drivers interact to strengthen or nullify firms' pre-entry advantage, and facilitate adaptation as the industry evolves. We also expand the treatment of exit by separating dissolution from acquisition, in which firms' capabilities continue to be utilized in the industry. Studying a recent shakeout in the global solar photovoltaic industry, we find that pre-entry capabilities and technology choices act in a complementary manner for some firms, thereby enhancing survival, and as buffers against exit for others. Nearly half of exits were via acquisitions, and technology choice at entry played an important role in determining how firms exited. Managerial Summary: New industries are often characterized by intense technology competition that culminates in a dominant technology followed by industry shakeout. Although prior research underscores the central role of technology choice and firm capabilities to survival, we do not actually know how firms with different capabilities and who have made competing technology choices survive an industry shakeout. In this article, we show how entrants' capabilities and technology choices can act in a complementary manner for some firms, enhancing their chance of survival, and as buffers against failure for others. Moreover, we explain why some firms that do exit are acquired, when others are dissolved.

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“…Small producers may then remain competitive, market structure may remain atomistic, and profitable entry may be feasible for decades. According to Bhaskarabhatla and Klepper (2014), this description fits the early US laser industry. Before the diode-pumped solid-state (DPSS) laser, individual laser types could hardly be substituted for each other because they differed in wavelength, maximum power, and other user-relevant characteristics.…”

Section: The Evolution Of Firm Populations In Innovative Industriesmentioning

confidence: 92%

“…From 1996 to 2007, the number of US laser producers fell by about 50% (from 172 to 87). Bhaskarabhatla and Klepper (2014) relate this drastic decrease to a major upheaval in laser technology: the diode-pumped solid state (DPSS) laser that replaced earlier laser types in a variety of applications. The development of the German laser industry exhibits a number of parallels to the USA.…”

Section: Introductionmentioning

confidence: 99%

Science and industry evolution: evidence from the first 50 years of the German laser industry

Buenstorf

Heinisch

2018

Small Bus Econ

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Latent submarket dynamics and industry evolution: lessons from the US laser industry

Cited by 39 publications

References 29 publications

''Then Came Cisco, and the Rest is History': A 'History Friendly' Model of the Local Area Networking Industry

''Then Came Cisco, and the Rest is History': A 'History Friendly' Model of the Local Area Networking Industry

Capabilities, technologies, and firm exit during industry shakeout: Evidence from the global solar photovoltaic industry

Science and industry evolution: evidence from the first 50 years of the German laser industry

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