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The Birth of a New Industry: Entry by Start-ups and the Drivers of Firm Growth. The Case of Encryption Software

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  • Marco S. Giarratana

Abstract

The paper analyses the birth of the Encryption Software Industry (ESI), a new niche in the software industry. Using a Chandlerian perspective, this work reports the main facts about firm entry and growth, with a particular focus on start-up strategies and actions. Since scale economies do not play a major role in ESI, the paper investigates the different sources of firm competitive advantages. This work shows that innovation and product differentiation, along with investments in co-specialised assets, are variables strongly correlated to young firm probability to survive and grow. In so doing, we have collected highly detailed information on product introduction, US patents granted, worldwide alliances and biographical data of firm founders.

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Bibliographic Info

Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2003/28.

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Date of creation: 30 Dec 2003
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Handle: RePEc:ssa:lemwps:2003/28

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Keywords: Entry; Entrepreneurship; Innovation; Software.;

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References

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Citations

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Cited by:
  1. Gambardella, Alfonso & Giarratana, Marco S., 2013. "General technological capabilities, product market fragmentation, and markets for technology," Research Policy, Elsevier, vol. 42(2), pages 315-325.
  2. Ashish Arora & Anand Nandkumar, 2007. "Securing Their Future? Entry And Survival In The Information Security Industry," NBER Working Papers 13634, National Bureau of Economic Research, Inc.
  3. Andrea Fosfuri & Marco S. Giarratana, 2004. "Product Strategies And Startups’ Survival In Turbulent Industries: Evidence From The Security Software Industry," Business Economics Working Papers wb044816, Universidad Carlos III, Departamento de Economía de la Empresa.
  4. Rui Baptista & Joana Mendonça, 2010. "Proximity to knowledge sources and the location of knowledge-based start-ups," The Annals of Regional Science, Springer, vol. 45(1), pages 5-29, August.
  5. Ashish Arora & Alfonso Gambardella & Laura Magazzini & Fabio Pammolli, 2009. "A Breath of Fresh Air? Firm Type, Scale, Scope and Selection Effects in Drug Development," KITeS Working Papers 003, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Mar 2009.
  6. Hyytinen, Ari & Maliranta, Mika, 2013. "Firm lifecycles and evolution of industry productivity," Research Policy, Elsevier, vol. 42(5), pages 1080-1098.
  7. Paulo Nunes & Zélia Serrasqueiro & João Leitão, 2013. "Assessing the nonlinear nature of the effects of R&D intensity on growth of SMEs: a dynamic panel data approach," Journal of Evolutionary Economics, Springer, vol. 23(1), pages 97-128, January.

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