Securing Their Future? Entry and Survival in the Information Security Industry

49 Pages Posted: 4 Jun 2008  

Ashish Arora

Duke University - Fuqua School of Business; National Bureau of Economics Research; Duke Innovation & Entrepreneurship Initiative

Anand Nandkumar

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Multiple version iconThere are 2 versions of this paper

Abstract

In this paper we study how the existence of a functioning market for technology differentially conditions the entry strategy and survival of different types of entrants, and the role of scale, marketing ability and technical assets using the context of the Information Security Market (ISM). Markets for technology facilitate entry of firms that lack proprietary technology and increase vertical specialization. However, they also increase the relative advantage of downstream capabilities, which is reflected in the relatively improved performance of incumbent Information and Communication Technologies (ICT) firms compared to startups. We find that diversifying entrants perform better relative to startups. Contrary to earlier studies, we find that spin-offs are rare in the ISM. Moreover, they do not perform any better than other startups. Also, firms founded by entrepreneurs from unrelated industries, perform markedly better than other startups. These findings reflect the non-manufacturing setting of this study, as well as the distinctive nature of software technology.

Keywords: Entrepreneurship, Technology licensing, firm performance

JEL Classification: L24, L25, L26

Suggested Citation

Arora, Ashish and Nandkumar, Anand, Securing Their Future? Entry and Survival in the Information Security Industry. 2008 Industry Studies Conference Paper. Available at SSRN: https://ssrn.com/abstract=1140684 or http://dx.doi.org/10.2139/ssrn.1140684

Ashish Arora (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

National Bureau of Economics Research

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

Anand Nandkumar

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

Paper statistics

Downloads
96
Rank
196,618
Abstract Views
649