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Collaboration in the Shadow of the Technology Frontier: Evidence from the Flat Panel Display Industry
Author(s) -
Wang I. Kim,
Yang Hsiaoshan,
Miller Douglas J.
Publication year - 2015
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2681
Subject(s) - shadow (psychology) , frontier , flat panel , competition (biology) , economics , position (finance) , panel data , sample (material) , technological change , industrial organization , shadow price , marketing , business , econometrics , computer science , political science , psychology , macroeconomics , ecology , mathematical optimization , chemistry , computer graphics (images) , mathematics , finance , chromatography , law , psychotherapist , biology
The literature on competition through innovation tends to emphasize the benefits of technological leadership. However, we explain why a capable firm might prefer to shadow the technology leader—remaining slightly behind rather than competing directly at the frontier. On the basis of a formal model and the competitive dynamics literature, we propose that the more benefits a firm gains from collaboration with a technological leader through licensing and supply agreements, the more likely the firm is to take a shadowing position. Our hypotheses, particularly regarding licensing from a technological leader, receive support from a large sample in the flat panel display industry. Copyright © 2014 John Wiley & Sons, Ltd.