Meta-Analysis of the Impact of Research Methods on Findings of First-Mover Advantage

VanderWerf, P. A., and Mahon, J. F., 1997. "Meta-Analysis of the Impact of Research Methods on Findings of First-Mover Advantage," Management Science, Vol. 43 (11): 1510-1519

11 Pages Posted: 20 May 2013

See all articles by Pieter A. Vanderwerf

Pieter A. Vanderwerf

Boston University - Questrom School of Business

John F. Mahon

University of Maine; University of Maine - School of Business

Date Written: May 19, 2013

Abstract

A long-standing hypothesis is that firms that enter a market early ("first movers") tend to have higher performance than their followers ("first-mover advantage"). Recently, researchers have begun to argue that the statistical tests that support this relationship are limited in their applicability. That is, it is suggested that because of the methods used, these tests show the relationship only for certain subsets of firms, markets, and types of performance. We performed a meta-analysis to determine whether the findings are in fact sensitive to the methods used. We discovered that tests using market share as their performance measure were sharply and significantly more likely to find a first-mover advantage than tests using other measures (such as profitability or survival). Also significantly more likely to find an advantage were tests that sample from individually selected industries and those that include no measures of the entrants' competitive strength. Conversely, we found little evidence that "survivor bias" (the exclusion of nonsurviving entrants from the sample) affects a test's findings.

The data further suggest that tests that use none of the questioned research practices will find a first-mover advantage no more often than can be accounted for by random statistical error alone.

Keywords: First-Mover Advantage, Market Pioneer, Meta-analysis

JEL Classification: C19, E19, E37, M29

Suggested Citation

Vanderwerf, Pieter A. and Mahon, John F., Meta-Analysis of the Impact of Research Methods on Findings of First-Mover Advantage (May 19, 2013). VanderWerf, P. A., and Mahon, J. F., 1997. "Meta-Analysis of the Impact of Research Methods on Findings of First-Mover Advantage," Management Science, Vol. 43 (11): 1510-1519. Available at SSRN: https://ssrn.com/abstract=2267214

Pieter A. Vanderwerf

Boston University - Questrom School of Business

595 Commonwealth Avenue
Boston, MA MA 02215
United States

John F. Mahon (Contact Author)

University of Maine ( email )

Orono, ME 04469
United States
207-581-1967 (Phone)

University of Maine - School of Business ( email )

United States

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