What Factors Affect the Persistence of an Innovation Advantage?

44 Pages Posted: 30 Jul 2015

Multiple version iconThere are 2 versions of this paper

Date Written: July 16, 2015

Abstract

Factors that affect a firm’s ability to achieve an advantage may differ from those that affect its ability to sustain that advantage. Moreover, if advantage is a relative concept then studies that relate resource stocks to ‘absolute’ outcomes say little about how resources contribute to enduring differences among firms. We explore these issues in the global semiconductor industry by analyzing how a firm’s resource stocks contribute to the persistence of an innovation advantage (a relative outcome). The findings demonstrate that a firm’s own production experience and the experience held by its partners contribute to temporary innovation advantages. The results also show that a firm’s own production experience yields a more durable innovation advantage as compared to the experience held by a firm’s partners and that the experience held by a firm’s partners provides a more enduring advantage than a firm’s patent stock.

Keywords: innovation, persistence, resource stocks, superior profits, temporary advantage

JEL Classification: M13, M19, O31, O32, O33, O34, L63

Suggested Citation

Madsen, Tammy L. and Leiblein, Michael J., What Factors Affect the Persistence of an Innovation Advantage? (July 16, 2015). Available at SSRN: https://ssrn.com/abstract=2637614 or http://dx.doi.org/10.2139/ssrn.2637614

Tammy L. Madsen (Contact Author)

Santa Clara University ( email )

Management Department
500 El Camino Real
Santa Clara, CA 95053
United States

Michael J. Leiblein

Ohio State University ( email )

700 Fisher Hall
2100 Neil Avenue
Columbus, OH 43210-1144
United States
614-292-0071 (Phone)
614-292-7062 (Fax)

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