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Internally Versus Externally Developed Technology and Market Acceptance of Innovations: The Complementary Role of Branding
Author(s) -
Patel Chirag,
Haon Christophe
Publication year - 2014
Publication title -
european management review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.784
H-Index - 32
eISSN - 1740-4762
pISSN - 1740-4754
DOI - 10.1111/emre.12029
Subject(s) - value (mathematics) , appropriation , marketing , business , technology acceptance model , technology development , industrial organization , economics , computer science , philosophy , linguistics , usability , human–computer interaction , machine learning , engineering , manufacturing engineering
Empirical studies that relate internally versus externally developed technology to market acceptance of innovation during emergent stages provide contradictory findings. We contend that these conflicting findings might be the result of a theoretical misspecification in existing models that fail to consider the effect of synergy between a firm's technology development choice and its branding choice. We use the concepts of value creation and value appropriation to develop our hypotheses relating different combinations of technology development and branding choices to market acceptance. With data on the early history of I nternet banking in the U nited S tates, we show that internally developed technology leads to greater market acceptance than externally developed technology, but this effect changes with the choice of a brand extension versus a new brand. Specifically, firms that combine internally developed technology with a new brand achieve greater market acceptance for their innovation during emergent stages.