Abstract

http://ssrn.com/abstract=1777241
 
 

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Complementary Assets as Pipes and Prisms: Innovation Incentives and Trajectory Choices


Brian Wu


University of Michigan, Stephen M. Ross School of Business

Zhixi Wan


University of Illinois at Urbana-Champaign - Department of Business Administration

Daniel Levinthal


University of Pennsylvania - Management Department

October 1, 2012

Forthcoming, Strategic Management Journal

Abstract:     
A long-standing interest in the technology strategy domain has been the question of the failure of incumbent firms in the face of radical technical change. We add to these prior contributions by highlighting the role a firm’s existing set of complementary assets have in influencing its investment in alternative technological trajectories. We develop an analytical model that considers firm heterogeneity with respect to both technological trajectories and complementary assets. Complementary assets play a dual role in incumbents’ investment behavior toward radical technological change: they are not only resources that can buffer firms from technology change, but also prisms through which firms view those changes, influencing both the magnitude of resources that should be invested and the trajectory to which these resources should be directed.

Number of Pages in PDF File: 51

Keywords: Complementary assets, technology strategy, innovation incentives, complement-preserving trajectory, complement-disrupting trajectory

JEL Classification: L13, O31, O32, O33

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Date posted: March 7, 2011 ; Last revised: May 7, 2013

Suggested Citation

Wu, Brian and Wan, Zhixi and Levinthal, Daniel, Complementary Assets as Pipes and Prisms: Innovation Incentives and Trajectory Choices (October 1, 2012). Forthcoming, Strategic Management Journal. Available at SSRN: http://ssrn.com/abstract=1777241 or http://dx.doi.org/10.2139/ssrn.1777241

Contact Information

Brian Wu (Contact Author)
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
Zhixi Wan
University of Illinois at Urbana-Champaign - Department of Business Administration ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
Daniel A. Levinthal
University of Pennsylvania - Management Department ( email )
The Wharton School
Philadelphia, PA 19104-6370
United States
215-898-6826 (Phone)
215-898-0401 (Fax)

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