Reconfiguration Strategies, Entrepreneurial Entry and Incubation of Nascent Industries: Three Essays

The first essay of my dissertation focuses on the incubation stage -- the period between introduction of a technological change and its first commercialization -- of an industry, which is an understudied phenomenon. It examines firms' technological investments in a nascent industry in anticipation of commercialization, and contributes novel insights to the classic industry evolution literature that conceptualizes industry formation from the first instance of product. Using the agricultural biotechnology industry as the empirical context, this essay documents not only the extent to which firms undertake technological investments in anticipation of entry, but also the heterogeneity in types of entrants and their modes of value capture. I thus shed light on the intertwined processes of economic value capture at the firm-level and ecosystem development at the industry-level that underpin incubation of nascent industries. The second essay examines the capability antecedents of a firm market entry into a nascent industry. A firm's technical capabilities and complementary assets, at time of entry, have been consistently noted as key determinants of the likelihood of entry. Drawing on the premise that firms make deliberate decisions regarding technological investments well before they enter nascent markets, I make a distinction between a firm's pre-entry and pre-investment capabilities and study the type of pre-investment capabilities that are related to the likelihood of firm entry. I suggest that a firm's pre-investment reconfiguration experiences are the critical capability: these experiences shape the firm's development of pre-entry technical capabilities and complementary assets, which in turn affect the likelihood of entry. I find empirical support for the mediating role of pre-entry capabilities to the relationship between pre-investment experiences and the likelihood of entry in the context of the population of firms that conducted R&D investments in agricultural biotechnology between 1980 and 2010. The third essay studies the reconfiguration strategies pursued by firms in anticipation of entry into a nascent industry. Whether entry to a nascent industry is undertaken by de novo startups, diversifying firms from related industries or industry incumbents from the obsolescing industry, a critical strategic action for firms is to achieve the required configuration of capabilities for operations in the new industry. The choice, timing, and sequence of these capability reconfiguration mechanisms may, however, differ across different types of firms. I provide theoretical propositions that link firm types to the underlying sources of heterogeneity and suggest how this heterogeneity leads to differential paths undertaken by de novo startups, diversifying firms and industry incumbents while reconfiguring themselves in anticipation of entry into a nascent industry. Implications of the model are discussed using three firm case studies from the agricultural biotechnology industry

Supply Portfolio Concentration in Outsourced Knowledge-Based Services

In the extant vertical integration literature, the question of how the firm's portfolio of outsourced work is managed across suppliers has been relatively understudied. We seek to advance this area of research by examining factors that influence how concentrated the firm's outsourcing is among its set of suppliers. Using data on the outsourcing of patent legal services, we find empirical evidence that outsourced knowledge-based service work is concentrated in the hands of fewer suppliers when: (1) it requires greater firm-specific knowledge; (2) there is a higher level of interrelatedness across outsourced projects; (3) the firm's reliance on outsourcing is high; (4) its outsourced projects are focused on a narrower (capability) domain; and (5) the technological dynamism of this domain is low. Our study suggests that examining portfolio-level phenomena in outsourcing is a useful complement to the predominant focus on transaction-level outcomes in prior research because it provides insights into how firms manage tradeoffs across their entire set of outsourced projects.

Historicism and Industry Emergence: Industry Knowledge from Pre-Emergence to Stylized Fact

https://scholarlycommons.pacific.edu/esob-facbooks/1010/thumbnail.jp