Entry into New Niches: The Effects of Firm Age and the Expansion of Technological Capabilities on Innovative Output and Impact

Strategic Management Journal, Forthcoming

30 Pages Posted: 13 Jun 2010

See all articles by Reddi Kotha

Reddi Kotha

Singapore Management University - Lee Kong Chian School of Business, Management Department

Yanfeng Zheng

Clemson University

Gerard George

Singapore Management University

Date Written: June 10, 2010

Abstract

We provide evidence that young firms systematically differ from older firms in their innovative output when they enter ‘new to the firm’ technological niches. We analyze data from 128 biotechnology firms since their inception and track these firms over time. Our analyses reveal that the organizational age at which the firm branches into new technological niches significantly influences its innovative activity. We refine the focus of the extant literature by separately examining the effects of branching on the quantity of innovative output, and the impact that this output has on the technology domain. Subsequent to branching into new niches, we find that older firms have a higher quantity of output than their younger counterparts; whereas young firms tend to outpace their older rivals with higher impact. The implications of these findings for the literature on dynamic capabilities and entrepreneurship are discussed.

Keywords: Capabilities, Biotechnology, Age, Innovation, Entry, Patents

JEL Classification: M1, M13, O31, O32

Suggested Citation

Kotha, Reddi and Zheng, Yanfeng and George, Gerard, Entry into New Niches: The Effects of Firm Age and the Expansion of Technological Capabilities on Innovative Output and Impact (June 10, 2010). Strategic Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1624362

Reddi Kotha

Singapore Management University - Lee Kong Chian School of Business, Management Department ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://www.business.smu.edu.sg/Faculty/management/reddikotha.asp

Yanfeng Zheng

Clemson University ( email )

101 Sikes Ave
Clemson, SC 29634
United States

Gerard George (Contact Author)

Singapore Management University ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://www.smu.edu.sg/faculty/profile/118836/Gerry-GEORGE

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