Participation in a Platform Ecosystem: Appropriability, Competition and Access to the Installed Base

39 Pages Posted: 12 Oct 2009  

Peng Huang

University of Maryland - Robert H. Smith School of Business

Marco Ceccagnoli

Scheller College of Business at Georgia Tech

Chris Forman

Georgia Institute of Technology - Scheller College of Business

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business

Date Written: September 30, 2009

Abstract

In this study we examine the antecedents of small independent software vendor (ISV) decisions to join a platform ecosystem. Using data on the history of partnering activities from 1201 ISVs from 1996 to 2004, we find that appropriability strategies based on intellectual property rights and the possession of downstream complementary capabilities by ISVs are positively related to partnership formation, and ISVs use these two mechanisms as substitutes to prevent expropriation by the platform owner. In addition, we show that greater competition in downstream product markets between the ISV and the platform owner is associated with a lower likelihood of partnership formation, while the platform’s penetration into the ISV’s target industries is positively associated with the propensity to partner. The results highlight the role of innovation appropriation, downstream complementary capabilities, and collaborative competition in the formation of a platform ecosystem.

Keywords: platform ecosystem, partnership, intellectual property rights, downstream capabilities

Suggested Citation

Huang, Peng and Ceccagnoli, Marco and Forman, Chris and Wu, D. J., Participation in a Platform Ecosystem: Appropriability, Competition and Access to the Installed Base (September 30, 2009). NET Institute Working Paper No. 09-14. Available at SSRN: https://ssrn.com/abstract=1480900 or http://dx.doi.org/10.2139/ssrn.1480900

Peng Huang (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Marco Ceccagnoli

Scheller College of Business at Georgia Tech ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Chris Forman

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business ( email )

800 West Peachtree Street, NW
Atlanta, GA 30308
United States
404-894-4364 (Phone)
404-894-6030 (Fax)

HOME PAGE: http://mgt.gatech.edu/wu

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