This paper investigates how the structure of cooperation in an industry influences the dynamics of entry by start-up firms. Competition over technological dominance induces the entry of start-up firms into new subfields as incumbent firms seek to expand the consumer base using their technology. By cooperating, incumbent firms succeed to varying degrees in establishing their technologies as a dominant standard by building central positions in a cooperative network. Start-ups tend to enter, however, if there is reasonable certainty that a dominant technology has been established. We find strong support for the relationship between network centrality, as a measure of technological dominance of a standard, and the entry of start-up firms into the semiconductor industry.
Bibliographical noteFunding Information:
~' This research was supported through a grant from AT&T administered under the auspices of the Reginald H. Jones Center. We would like to acknowledge the assistance of Carolyn Doles and Dataquest and the comments of Kathleen Conner, Diana Day, and Jacques Delacroix. * Corresponding author. t Current address: Edwin L. Cox School of Business, Southern Methodist University, Dallas, TX 7525-0333, USA. * Current address: Department of Business Administration, University of Illinois, Champaign, IL, USA.
All Science Journal Classification (ASJC) codes
- Strategy and Management
- Management Science and Operations Research
- Management of Technology and Innovation