Market Entry by High Technology Startups: The Effect of Competition Level and Startup Innovativeness

Strategy Science, Forthcoming

45 Pages Posted: 19 Jul 2017

See all articles by Niron Hashai

Niron Hashai

Interdisciplinary Center (IDC) Herzliyah; Hebrew University of Jerusalem - Jerusalem School of Business Administration

Sarit Markovich

Kellogg School of Management

Date Written: July 15, 2017

Abstract

We study the level of market competition as a determinant for the propensity of cooperation between startups entering new markets and incumbents operating in these markets. We provide ample empirical evidence suggesting that startups and incumbents are more likely to cooperate in the commercialization of startups' technological innovations, in markets with either high or low competition levels than in markets with moderate competition levels. Importantly, we further show that startups' innovativeness has a contingent effect — it encourages cooperation at low-to-moderate levels of competition, but encourages competition at moderate-to-high levels of competition.

Keywords: high technology startups, incumbents, cooperation, competition, competition level, innovativeness

Suggested Citation

Hashai, Niron and Markovich, Sarit, Market Entry by High Technology Startups: The Effect of Competition Level and Startup Innovativeness (July 15, 2017). Strategy Science, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3002929

Niron Hashai (Contact Author)

Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 46150
Israel

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem, 91905
Israel

Sarit Markovich

Kellogg School of Management ( email )

2211 Campus Drive
Kellogg
Evanston, IL IL 60208
United States

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