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First-mover and incumbency advantages in mobile telecommunications

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  • Jakopin, Nejc M.
  • Klein, Andreas
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    Abstract

    The present study analyzes data of 191 mobile network operators from 49 countries in order to identify the extent of first-mover and incumbency advantages. A large number of new market entry opportunities and involvement of many previous state-owned monopolists have characterized the mobile telecommunication services industry over the last 20years. The results of this study show that both, first-movers and incumbents in the mobile telecommunication services industry are more successful regarding market share and operational financial results than later entrants. A pioneer position and incumbency are only loosely connected, with success originating both from first-mover and incumbency advantages. Moreover, the timing effect is stronger and more sustainable for market share compared to operating margin, indicating that followers successfully compensate part of their market share disadvantages with strategies like SIM-only tariffs, outsourcing and alternative distribution approaches. In addition, the typical rank-based measurement of timing position reveals somewhat stronger associations than a variable that is using the time elapsed between commercial launches of pioneers and followers.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Business Research.

    Volume (Year): 65 (2012)
    Issue (Month): 3 ()
    Pages: 362-370

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    Handle: RePEc:eee:jbrese:v:65:y:2012:i:3:p:362-370

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    Web page: http://www.elsevier.com/locate/jbusres

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    Keywords: First-mover advantage; Incumbent; Mobile telecommunications; Pioneer; Timing;

    References

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    1. Finney, R. Zachary & Lueg, Jason E. & Campbell, Noel D., 2008. "Market pioneers, late movers, and the resource-based view (RBV): A conceptual model," Journal of Business Research, Elsevier, vol. 61(9), pages 925-932, September.
    2. Chaim Fershtman, 1993. "On the Value of Incumbency: Managerial Reference Point and Loss Aversion," Discussion Papers 1020, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    3. Usero, Belén & Fernández, Zulima, 2009. "First come, first served: How market and non-market actions influence pioneer market share," Journal of Business Research, Elsevier, vol. 62(11), pages 1139-1145, November.
    4. Koski, Heli A. & Majumdar, Sumit K., 2002. "Paragons of virtue? Competitor entry and the strategies of incumbents in the U.S. local telecommunications industry," Information Economics and Policy, Elsevier, vol. 14(4), pages 453-480, December.
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    7. Elie Appelbaum & Eliakim Katz, 1996. "Corporate taxation, incumbency advantage and entry," Working Papers 1996_12, York University, Department of Economics.
    8. Gruber, Harald, 1999. "An investment view of mobile telecommunications in the European Union," Telecommunications Policy, Elsevier, vol. 23(7-8), pages 521-538, August.
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    10. MB Sarkar & S Tamer Cavusgil & Preet S Aulakh, 1999. "International Expansion of Telecommunication Carriers: The Influence of Market Structure, Network Characteristics, and Entry Imperfections," Journal of International Business Studies, Palgrave Macmillan, vol. 30(2), pages 361-381, June.
    11. Ramamurti, Ravi, 2000. "Risks and rewards in the globalization of telecommunications in emerging economies," Journal of World Business, Elsevier, vol. 35(2), pages 149-170, July.
    12. Pieter A. VanderWerf & John F. Mahon, 1997. "Meta-Analysis of the Impact of Research Methods on Findings of First-Mover Advantage," Management Science, INFORMS, vol. 43(11), pages 1510-1519, November.
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    14. Lopez, Luis E. & Roberts, Edward B., 2002. "First-mover advantages in regimes of weak appropriability: the case of financial services innovations," Journal of Business Research, Elsevier, vol. 55(12), pages 997-1005, December.
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    Cited by:
    1. Muck, Johannes & Heimeshoff, Ulrich, 2012. "First mover advantages in mobile telecommunications: Evidence from OECD countries," DICE Discussion Papers 71, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Elie Appelbaum & Eliakim Katz, 1996. "Corporate taxation, incumbency advantage and entry," Working Papers 1996_12, York University, Department of Economics.

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