Whether and When? Probability and Timing of Incumbents' Entry into Emerging Industrial Subfields

Many people have helped with this paper. The author would like to acknowledge explicitly the assistance of Glenn Carroll, David Teece, and the ASQ editor and reviewers. Part of this research was conducted with financial assistance from the Social Sciences and Humanities Research Council of Canada and the University of California at Berkeley. This paper examines the probability and timing of entry by industry incumbents into emerging technical subfields. When a new technical subfield of an industry emerges, an industry incumbent faces opposing entry incentives, either to wait until technical and market uncertainties subside or to stake out a strong position early. This paper argues that an incumbent is likely to enter a new subfield if the firm's core products are threatened or if it possesses industry-specialized supporting assets. The greater the competitive threat, the less likely an incumbent is to enter but the earlier it will do so. The predictions are supported with analysis of 30 years of entry data from five subfields of the American medical diagnostic imaging industry.'

[1]  Michael T. Hannan,et al.  Age dependence in the mortality of national labor unions: Comparisons of parametric models , 1989 .

[2]  D. B. Montgomery,et al.  First‐mover advantages , 1988 .

[3]  Richard R. Nelson,et al.  Appropriating the Returns from Industrial R&D , 1988 .

[4]  W. Mitchell,et al.  Dynamic commercialization : an organizational economic analysis of innovation in the medical diagnostic imaging industry , 1988 .

[5]  James G. March,et al.  Variable risk preferences and adaptive aspirations , 1988 .

[6]  S. Winter,et al.  An Evolutionary Theory of Economic Change.by Richard R. Nelson; Sidney G. Winter , 1987 .

[7]  R. V. Wyk.  Innovation: The attacker's advantage : Richard N. Foster 316 pages, £14.95 (London, Macmillan, 1986) , 1987 .

[8]  B. Wernerfelt,et al.  Competitive strategy under uncertainty , 1987 .

[9]  W. Dugger.  The Economic Institutions of Capitalism , 1987 .

[10]  C. Shapiro,et al.  R&D Rivalry with Licensing or Imitation , 1987 .

[11]  M. Tushman,et al.  Technological Discontinuities and Organizational Environments , 1986 .

[12]  John H. Friar,et al.  Technology strategy : the case of the diagnostic ultrasound industry , 1986 .

[13]  Linsu Kim,et al.  Invasion of a Stable Business by Radical Innovation , 1985 .

[14]  O. Williamson.  The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting , 1985 .

[15]  M. Hannan,et al.  Social Dynamics: Models and Methods. , 1986 .

[16]  Isadore Meschan,et al.  Introduction to diagnostic imaging , 1984 .

[17]  Paul Stoneman,et al.  The Role of Supply Factors in the Diffusion of New Process Technology , 1983 .

[18]  Jennifer F. Reinganum.  Uncertain Innovation and the Persistence of Monopoly , 1982 .

[19]  Eric von Hippel,et al.  Appropriability of innovation benefit as a predictor of the source of innovation , 1982 .

[20]  P. Joskow,et al.  Controlling Hospital Costs: The Role of Government Regulation , 1982 .

[21]  D. Newbery,et al.  Preemptive Patenting and the Persistence of Monopoly , 1982 .

[22]  Russell I. Fries,et al.  Patterns of Technological Innovation , 1984 .

[23]  E. Mansfield,et al.  Imitation Costs and Patents: An Empirical Study , 1981 .

[24]  David J. Teece,et al.  The Market for Know-How and the Efficient International Transfer of Technology , 1981 .

[25]  J. Kalbfleisch,et al.  The Statistical Analysis of Failure Time Data , 1980 .

[26]  D. Abell,et al.  Defining the Business: The Starting Point of Strategic Planning , 1980 .

[27]  William J. Abernathy,et al.  Patterns of Industrial Innovation , 1978 .

[28]  E. Hanushek.  Statistical methods for social scientists , 1977 .

[29]  Mark S. Granovetter.  The Strength of Weak Ties , 1973, American Journal of Sociology.

[30]  R. D. Peterson,et al.  Economic organization in medical equipment and supply , 1973 .

[31]  Leslie Cromwell.  Medical Instrumentation for Health Care , 1972 .

[32]  F. Scherer,et al.  Industrial Market Structure and Economic Performance. , 1971 .

[33]  Yoram Barzel,et al.  Optimal Timing of Innovations , 1968 .

[34]  Tom R. Burns,et al.  The Management of Innovation. , 1963 .

[35]  R. Nelson.  The Simple Economics of Basic Scientific Research , 1959, Journal of Political Economy.

[36]  J. Jewkes,et al.  The Sources of Invention. , 1958 .

[37]  K. Boulding,et al.  Barriers to New Competition: Their Character and Consequences in Manufacturing Industries. , 1957 .

[38]  P. Hodges.  Development of Diagnostic X-Ray Apparatus During the First Fifty Years , 1945 .