Determinants of Innovation and Competition of Component System Technologies in the Local Area Network Industry
AbstractThis work is concerned with the determinants of innovations and competition of technologies in the case of the Local Area Network industry. It focuses in particular on two suppliers of LAN components: the access technology industry and the internetworking industry. Two elements driving the diffusion are identified, 1) reduction of technological uncertainty, and 2) the extent of network externalities. The effects of these mechanisms on the process of diffusion of technologies into new application domains are analysed through the dynamics of entry and exit of firms in both industries. We find that the effects on the dynamic are different depending on the kind of innovation. The above mechanisms may guarantee a match between suppliers and adopters and foster the innovation diffusion. Nevertheless, it may occur that when an innovation occurs in one of the two industries and the ‘match’ is disrupted it needs time to be re-established, and innovation diffusion may slow down. We speculate on the determinants of these findings and their limitations.
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Bibliographic InfoPaper provided by KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy in its series KITeS Working Papers with number 117.
Length: 32 pages
Date of creation: Sep 2000
Date of revision: Sep 2000
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Find related papers by JEL classification:
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-01-21 (All new papers)
- NEP-NET-2001-02-21 (Network Economics)
- NEP-TID-2001-02-21 (Technology & Industrial Dynamics)
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