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Innovating standards through informal consortia: The case of wireless telecommunications

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  • Delcamp, Henry
  • Leiponen, Aija

Abstract

We empirically examine the effects of industry consortia on the coordination of innovation strategies of the members. Our analyses utilize membership data from 32 consortia in wireless telecommunication technology subfields from 2000 to 2005 and prior art citations in standard-essential patents. We find that connections among firms in informal and technically-oriented consortia significantly increase the likelihood that firms cite each other's patents in subsequent patents essential for the UMTS wireless telecommunication standard. Inventions that are likely to become part of the UMTS system tend to build on inventions by firm peers who were members of the same consortia, controlling for patent or firm fixed effects, technology class, and other characteristics. Consortia may enhance productivity of invention and increase the incentives to invest in R&D by internalizing potential externalities. They may also enhance efficiency of standardization by facilitating the interaction of committee and market processes. Consortia thus structure and constrain the process of innovating standardized technologies. This is problematic if consortia are not truly accessible for all the relevant parties. Policymakers thus need to balance these effects. For managers, the results show that participation in a variety of technical consortia enables influencing peers' innovation strategies related to compatibility standards.

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  • Delcamp, Henry & Leiponen, Aija, 2014. "Innovating standards through informal consortia: The case of wireless telecommunications," International Journal of Industrial Organization, Elsevier, vol. 36(C), pages 36-47.
    • Handle: RePEc:eee:indorg:v:36:y:2014:i:c:p:36-47
    DOI: 10.1016/j.ijindorg.2013.07.004
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    Cited by:

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    2. Justus Baron & Yann Ménière & Tim Pohlmann, 2012. "Joint innovation in ICT standards: How consortia drive the volume of patent filings," Working Papers hal-00707291, HAL.
    3. Tim POHLMANN, 2014. "The Evolution of ICT Standards Consortia," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(95), pages 17-40, 3rd quart.
    4. Susan K. Cohen & Sean T. Hsu & Kristina B. Dahlin, 2016. "With Whom Do Technology Sponsors Partner During Technology Battles? Social Networking Strategies for Unproven (and Proven) Technologies," Organization Science, INFORMS, vol. 27(4), pages 846-872, August.
    5. Hong Jiang & Sipeng Gao & Yang Song & Kuang Sheng & Gehan A. J. Amaratunga, 2019. "An Empirical Study on the Impact of Collaborative R&D Networks on Enterprise Innovation Performance Based on the Mediating Effect of Technology Standard Setting," Sustainability, MDPI, Open Access Journal, vol. 11(24), pages 1-20, December.
    6. Annika Lorenz & Michael Raven & Knut Blind, 2019. "The role of standardization at the interface of product and process development in biotechnology," The Journal of Technology Transfer, Springer, vol. 44(4), pages 1097-1133, August.
    7. Kang, Byeongwoo & Bekkers, Rudi, 2015. "Just-in-time patents and the development of standards," Research Policy, Elsevier, vol. 44(10), pages 1948-1961.
    8. Raven, Michael & Blind, Knut, 2017. "The characteristics and impacts of scientific publications in biotechnology research referenced in standards," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 167-179.
    9. Wiegmann, Paul Moritz & de Vries, Henk J. & Blind, Knut, 2017. "Multi-mode standardisation: A critical review and a research agenda," Research Policy, Elsevier, vol. 46(8), pages 1370-1386.
    10. Justus Baron & Daniel F. Spulber, 2018. "Technology Standards and Standard Setting Organizations: Introduction to the Searle Center Database," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(3), pages 462-503, September.
    11. Justus Baron & Cher Li & Shukhrat Nasirov, 2019. "Why do R&D-intensive firms participate in standards organizations? The role of patents and product-market position," Discussion Papers 2019-16, University of Nottingham, GEP.
    12. Blind, Knut & Mangelsdorf, Axel, 2016. "Motives to standardize: Empirical evidence from Germany," Technovation, Elsevier, vol. 48, pages 13-24.
    13. Daniel F Spulber, 2019. "Standard Setting Organisations and Standard Essential Patents: Voting and Markets," Economic Journal, Royal Economic Society, vol. 129(619), pages 1477-1509.
    14. Justus Baron & Kirti Gupta, 2018. "Unpacking 3GPP standards," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(3), pages 433-461, September.
    15. Justus Baron & Jorge Contreras & Martin Husovec & Pierre Larouche, 2019. "Making the Rules: The Governance of Standard Development Organizations and their Policies on Intellectual Property Rights," JRC Working Papers JRC115004, Joint Research Centre (Seville site).
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    17. Wen Wen & Chris Forman & Sirkka Jarvenpaa, 2014. "How Do Open Standards Influence Inventive Activity? Evidence from the IETF," Working Papers 14-20, NET Institute.

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    More about this item

    Keywords

    Consortia; Telecommunication standard; R&D coordination; Essential patent;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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