Forthcoming, Strategic Management Journal
51 Pages Posted: 7 Mar 2011 Last revised: 7 May 2013
Date Written: October 1, 2012
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.
Keywords: Complementary assets, technology strategy, innovation incentives, complement-preserving trajectory, complement-disrupting trajectory
JEL Classification: L13, O31, O32, O33
Suggested Citation: 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: https://ssrn.com/abstract=1777241 or http://dx.doi.org/10.2139/ssrn.1777241