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New Product Development and Firm Value in Mobile Handset Production

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  • Koski, Heli
  • Kretschmer, Tobias

Abstract

We study the effect of new product introduction on firm value. Using a unique sample on mobile phone handset introduction by 16 major handset manufacturers over 10 years, we distinguish between imitative product introduction and truly innovative product introduction. We find that while most product introduction is imitative, both types of innovation increase firm value. However, truly innovative innovation is found to increase firm value by more than imitative introductions.

Suggested Citation

  • Koski, Heli & Kretschmer, Tobias, 2009. "New Product Development and Firm Value in Mobile Handset Production," Discussion Papers 1174, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:dpaper:1174
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    References listed on IDEAS

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    1. Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, vol. 91(4), pages 909-923, September.
    2. Hall, B.H., 1999. "Innovation and Market Value," Economics Papers 1999-w3, Economics Group, Nuffield College, University of Oxford.
    3. Paul A. David & Gavin Wright, "undated". "General Purpose Technologies and Surges in Productivity: Historical Reflections on the Future of the ICT Revolution," Working Papers 99026, Stanford University, Department of Economics.
    4. Heli Koski & Tobias Kretschmer, 2007. "Innovation and Dominant Design in Mobile Telephony," Industry and Innovation, Taylor & Francis Journals, vol. 14(3), pages 305-324.
    5. Nina Czernich & Oliver Falck & Tobias Kretschmer & Ludger Woessmann, 2011. "Broadband Infrastructure and Economic Growth," Economic Journal, Royal Economic Society, vol. 121(552), pages 505-532, May.
    6. Paul A. David & Gavin Wright, 2005. "General Purpose Technologies and Productivity Surges: Historical Reflections on the Future of the ICT Revolution," Economic History 0502002, EconWPA.
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    Cited by:

    1. Joan Crespo & Raphaël Suire & Jérôme Vicente, 2016. "Network structural properties for cluster long-run dynamics: evidence from collaborative R&D networks in the European mobile phone industry," Industrial and Corporate Change, Oxford University Press, vol. 25(2), pages 261-282.
    2. Ronald Klingebiel & John Joseph, 2016. "Entry timing and innovation strategy in feature phones," Strategic Management Journal, Wiley Blackwell, vol. 37(6), pages 1002-1020, June.
    3. Bouwman, Harry & Carlsson, Christer & Carlsson, Joanna & Nikou, Shahrokh & Sell, Anna & Walden, Pirkko, 2014. "How Nokia failed to nail the Smartphone market," 25th European Regional ITS Conference, Brussels 2014 101414, International Telecommunications Society (ITS).
    4. Jorge Alberto Rivera Godoy, 2012. "La incidencia de la innovación sobre la creación de valor: propuesta de un modelo desde la perspectiva financiera," REVISTA FACULTAD DE CIENCIAS ECONÓMICAS, UNIVERSIDAD MILITAR NUEVA GRANADA, December.
    5. Senyuta, Olena & Žigić, Krešimir, 2016. "Managing spillovers: An endogenous sunk cost approach," Information Economics and Policy, Elsevier, vol. 35(C), pages 45-64.

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    Keywords

    product innovation; mobile telephony; firm value;

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