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The Role of Pre-Entry Experience, Entry Timing, and Product Technology Strategies in Explaining Firm Survival

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Author Info

  • Barry L. Bayus

    ()
    (Kenan-Flagler Business School, University of North Carolina, Chapel Hill, North Carolina 27599)

  • Rajshree Agarwal

    ()
    (College of Business, University of Illinois at Urbana-Champaign, Champaign, Illinois 61822)

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    Abstract

    Studying the U.S. personal computer industry from its inception in 1974 through 1994, we address the following questions. What product technology strategies increase the survival chances of entrants into new, technologically dynamic industries? Does the effectiveness of these strategies differ by pre-entry experience? Does the effectiveness of these strategies differ by when firms enter a new industry? Consistent with the published literature, we find that diversifying entrants have an initial survival advantage over entrepreneurial startups. But, we find the reverse for later entrants: startups that enter later in the industry have a survival advantage over the later entering diversifying entrants. We explain this finding in terms of the firms' product technology strategies (i.e., offering products based on the technology standard and products incorporating the latest technology), pre-entry experience, and entry timing. Our findings highlight that it is crucial to study what firms do after they enter a new industry to more completely understand their ultimate performance.

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    File URL: http://dx.doi.org/10.1287/mnsc.1070.0737
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 53 (2007)
    Issue (Month): 12 (December)
    Pages: 1887-1902

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    Handle: RePEc:inm:ormnsc:v:53:y:2007:i:12:p:1887-1902

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    Related research

    Keywords: innovation; industry evolution; marketing; diversifying entrants; entrepreneurial startups;

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    Cited by:
    1. Lofstrom, Magnus & Bates, Timothy & Parker, Simon C., 2014. "Why are some people more likely to become small-businesses owners than others: Entrepreneurship entry and industry-specific barriers," Journal of Business Venturing, Elsevier, vol. 29(2), pages 232-251.
    2. Dirk Oberschachtsiek, 2014. "Waiting to start a business venture. Empirical evidence on the determinants," Working Paper Series in Economics 293, University of Lüneburg, Institute of Economics.
    3. René Bohnsack & Jonatan Pinkse & Ans Kolk, 2014. "Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles," Grenoble Ecole de Management (Post-Print) hal-00936886, HAL.
    4. Deng, Ziliang & Guo, Honglin & Zhang, Weifu & Wang, Chengqi, 2014. "Innovation and survival of exporters: A contingency perspective," International Business Review, Elsevier, vol. 23(2), pages 396-406.
    5. Cefis, Elena & Marsili, Orietta, 2012. "Going, going, gone. Exit forms and the innovative capabilities of firms," Research Policy, Elsevier, vol. 41(5), pages 795-807.
    6. Taylor, Margaret & Taylor, Andrew, 2012. "The technology life cycle: Conceptualization and managerial implications," International Journal of Production Economics, Elsevier, vol. 140(1), pages 541-553.
    7. Lamin, Anna & Dunlap, Denise, 2011. "Complex technological capabilities in emerging economy firms: The role of organizational relationships," Journal of International Management, Elsevier, vol. 17(3), pages 211-228, September.

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