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Demand and Innovation in Services: the Case of Mobile Communications

Author Info

Listed author(s):
  • Nicoletta Corrocher

    (CESPRI - Bocconi University, Milan, Italy and NFH - University of Tromso, Tromso, Norway.)

  • Lorenzo Zirulia

    (CESPRI - Bocconi University, Milan and University of Bologna, Bologna, Italy.)

Abstract

This paper aims at analyzing the characteristics and the determinants of innovation in the mobile communication service industry, by emphasising in particular the role of demand. In a Shumpeterian spirit, we argue that competition in this sector crucially depends upon innovation, and that, given the specific characteristics of the industry, firms' innovative strategies are strongly affected by demand. Our main point is that in a context of uncertainty, demand affects firms' innovative strategies in two ways: first, by providing information on users' behaviour and by increasing the capability of market segmentation; second, by providing invcentives to innovate. This argument is supported by an empirical analysis carried out on the basis of an original dataset including all the tariff plans offered in the history of the Italian market up to 2005. We find that both firms' installed base of customers and market saturation play a role in shaping firms' innovative activities, in terms of number and type of innovations.

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File URL: ftp://ftp.unibocconi.it/pub/RePEc/cri/papers/WP199CorrocherZirulia.pdf
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Paper provided by KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy in its series KITeS Working Papers with number 199.

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Length: pages 37
Date of creation: Mar 2007
Date of revision: Mar 2007
Handle: RePEc:cri:cespri:wp199
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Keywords: Service Innovation; Demand Characteristics; Mobile Communications.;

Other versions of this item:

Find related papers by JEL classification:
  • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
  • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
  • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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  1. repec:eee:ecolet:v:71:y:2001:i:3:p:413-42 is not listed on IDEAS
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Cited by:

  1. Srinuan, Chalita & Srinuan, Pratompong & Bohlin, Erik, 2012. "Exploring mobile pricing strategies and innovations in the Thai mobile communications market," 19th ITS Biennial Conference, Bangkok 2012: Moving Forward with Future Technologies - Opening a Platform for All 72522, International Telecommunications Society (ITS).
  2. Claussen, Jörg & Essling, Christian & Kretschmer, Tobias, 2015. "When less can be more – Setting technology levels in complementary goods markets," Research Policy, Elsevier, vol. 44(2), pages 328-339.
  3. Snyder, Hannah & Witell, Lars & Gustafsson, Anders & Fombelle, Paul & Kristensson, Per, 2016. "Identifying categories of service innovation: A review and synthesis of the literature," Journal of Business Research, Elsevier, vol. 69(7), pages 2401-2408.
  4. Guan, Jian Cheng & Yan, Yan, 2016. "Technological proximity and recombinative innovation in the alternative energy field," Research Policy, Elsevier, vol. 45(7), pages 1460-1473.
  5. Sang-Gun Lee & Eui-bang Lee & Chang-Gyu Yang, 2014. "Strategies for ICT product diffusion: the case of the Korean mobile communications market," Service Business, Springer;Pan-Pacific Business Association, vol. 8(1), pages 65-81, March.
  6. Prajogo, Daniel I., 2016. "The strategic fit between innovation strategies and business environment in delivering business performance," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 241-249.
  7. Karacuka, Mehmet & Çatık, A. Nazif & Haucap, Justus, 2013. "Consumer choice and local network effects in mobile telecommunications in Turkey," Telecommunications Policy, Elsevier, vol. 37(4), pages 334-344.
  8. Jordan Robert Gamble & Michael Brennan & Rodney Mcadam, 2016. "A Contemporary And Systematic Literature Review Of User-Centric Innovation: A Consumer Perspective," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1650011-01 .

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