The Role of Industry Dynamics in the Persistence of First Mover Advantages

Abstract

This is the accepted version of the paper.This version of the publication may differ from the final published version.Permanent repository link: http://openaccess.city.ac.uk/15193/ Link to published version: http://dx.We advance first mover advantages literature by adding novel insights into the conditions that affect the persistence of first mover profitability and market share. We investigate the role of two industry dynamicsmarket growth and technological discontinuityand we argue that they will negatively affect the persistence of first mover performance. We test our hypotheses in the context of the European mobile communications industry by estimating System GMM models on a longitudinal panel of 65 companies in 19 markets over the period 1998-2008. Model estimations confirm that industry dynamics affect the persistence of first mover advantages. For instance, we find robust empirical evidence that technological discontinuity is detrimental to both first movers' market share and profitability.

Supplier Innovation Strategy and Performance: A Matter of Supply Chain Market Positioning

“…In general, while many earlier studies have discussed and demonstrated first-mover advantages based on market share (e.g., Carpenter & Nakamoto, 1989;Cohen, Nelson, & Walsh, 1997;Lieberman & Montgomery, 1998), other studies have challenged the notion that competitive advantage automatically accrues to the leading innovator (Baldwin & Childs, 1969;Gal-Or, 1985;Ofek & Turut, 2008). Research on these issues have advanced considerably and much of the contemporary effort focuses on further elucidating contingencies defining when pioneering is likely to be a superior strategy (e.g., Lieberman & Montgomery, 2013;Gomez, Lanzolla, & Maicas, 2016). More recently, studies in this stream have documented contextual environmentlevel conditions that may affect first-mover advantage and moved forward the notion that a firm's environment needs to be considered and understood in examining leading versus laggard strategies (Suarez & Lanzolla, 2005;Bamberger, 2008;McCarthy, Lawrence, Wixted, & Gordon, 2010;Kim & Lee, 2011;Lieberman & Montgomery, 2013;Vidal & Mitchell, 2013;Gomez et al, 2016).…”

“…Research on these issues have advanced considerably and much of the contemporary effort focuses on further elucidating contingencies defining when pioneering is likely to be a superior strategy (e.g., Lieberman & Montgomery, 2013;Gomez, Lanzolla, & Maicas, 2016). More recently, studies in this stream have documented contextual environmentlevel conditions that may affect first-mover advantage and moved forward the notion that a firm's environment needs to be considered and understood in examining leading versus laggard strategies (Suarez & Lanzolla, 2005;Bamberger, 2008;McCarthy, Lawrence, Wixted, & Gordon, 2010;Kim & Lee, 2011;Lieberman & Montgomery, 2013;Vidal & Mitchell, 2013;Gomez et al, 2016).…”

Innovative strategies and corporate profitability: the positive resources dependence from political network

“…This is what Carpenter & Nakamoto (1989), Kerin et al (1992), Cohen and Levinthal (1989), Lieberman and Montgomery (1988), Ofek & Turut (2008) has confirmed the positive effects of "first-moving" perception in innovation. However, in the opposite side, it has been figured out that the notion challenge of competitive advantages and the contextual environment-level condition would mitigate the effect of first-mover advantage or even the true meaning of innovation (Suarez and Lanzolla, 2005;Bamberger, 2008;McCarthy et al, 2010;Kim and Lee, 2011;Lieberman and Montgomery, 2013;Vidal and Mitchell, 2013;Gomez et al, 2016). In contrast to low-tech or non-tech firm, the high-tech corporates have decided to invest a lot of resources and capital to R&D and make this become the intensive and rapid changes in new products, yet these kinds of investments required the effectiveness, efficiency, and even the real-valued added to the products (Chandler, 1994;Mizik and Jacobson, 2003).…”

“…In order to facilitate this purpose, the model will base strictly on the theoretical arguments of the following literature: (i) the first-mover advantages for the relationship between innovative capacity and firm's profitability (Lieberman & Montgomery, 1988;Lieberman and Montgomery, 2013;Gomez et al, 2016); (ii) the "resources-dependence theory" for the impact of political connection on corporate performance (Pfeffer, 1972;bib_citation_to_be_resolvedPfeffer and Salancik, 2003;Hillman, 2005;Wu, 2018), and (iii) the "business political tie of the network legitimacy" for the correspondence of innovative performance to political network (Peng and Luo, 2000;Shu et al, 2015;Hemmert et al, 2016;Mingzang 2018). Henceforth, we can construct the economic model as follows:…”

Diversity in technology competition: The link between platforms and sociotechnical transitions

“…The discussion above points to the potential for conceptual integration between platform and transition research frameworks. A more detailed reviews about platforms, competition strategies, and the emerging research agenda on network effects, leveraging complementor dynamics for competitive advantage is provided in [90,[102][103][104][105]. A complete discussion is beyond the scope of this paper.…”