Participation in a Platform Ecosystem: Appropriability, Competition, and Access to the Installed Base
AbstractIn this study we examine the antecedents of small independent software vendor (ISV) decisions to join a platform ecosystem. Using data on the history of partnering activities from 1201 ISVs from 1996 to 2004, we find that appropriability strategies based on intellectual property rights and the possession of downstream complementary capabilities by ISVs are positively related to partnership formation, and ISVs use these two mechanisms as substitutes to prevent expropriation by the platform owner. In addition, we show that greater competition in downstream product markets between the ISV and the platform owner is associated with a lower likelihood of partnership formation, while the platform’s penetration into the ISV’s target industries is positively associated with the propensity to partner. The results highlight the role of innovation appropriation, downstream complementary capabilities, and collaborative competition in the formation of a platform ecosystem.
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Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 09-14.
Length: 39 pages
Date of creation: Sep 2009
Date of revision: Sep 2009
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Web page: http://www.NETinst.org/
platform ecosystem; partnership; intellectual property rights; downstream capabilities;
Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-24 (All new papers)
- NEP-COM-2009-10-24 (Industrial Competition)
- NEP-INO-2009-10-24 (Innovation)
- NEP-IPR-2009-10-24 (Intellectual Property Rights)
- NEP-NET-2009-10-24 (Network Economics)
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