Competitive Dynamism in Nascent Markets: Trademarks and Superstar Firm Entry in the Metaverse

40 Pages Posted: 7 Aug 2023 Last revised: 31 Oct 2023

See all articles by Wendy A. Bradley

Wendy A. Bradley

Southern Methodist University (SMU) - Strategy & Entrepreneurship Department

Julian Kolev

United States Patent and Trademark Office

Date Written: September 1, 2023

Abstract

Does entry by a superstar firm change the competitive dynamics of nascent industries? Using USPTO trademark data and a quasi-experimental design, we explore this question by analysing the development of new products and services in the metaverse. We develop a theoretical framework of heterogeneous strategies for market entry under uncertainty, contrasting competition in digital vs. physical industries. Empirically, we show that firm size has a strong positive correlation with metaverse participation among U.S.-based trademarking firms, and that this effect is amplified for born-digital and global, physical-goods firms. However, following Facebook’s entry in 2014, we document a 10% decline in metaverse engagement; decomposing this average effect, larger and born-digital firms were minimally impacted, while globalized physical-goods firms experienced the largest declines. These results suggest that physical-goods firms are much more sensitive to superstar entry than digital-goods firms in nascent markets. Our analysis contributes to the understanding of intangible assets as key drivers of firms’ competitive advantage in the global, digital economy.

Keywords: trademarks, innovation, virtual worlds, metaverse, technological change

JEL Classification: C38, L26, M13, O34

Suggested Citation

Bradley, Wendy and Kolev, Julian, Competitive Dynamism in Nascent Markets: Trademarks and Superstar Firm Entry in the Metaverse (September 1, 2023). USPTO Economic Working Paper No. 2023-1, SMU Cox School of Business Research Paper No. 23-15, Available at SSRN: https://ssrn.com/abstract=4576986 or http://dx.doi.org/10.2139/ssrn.4576986

Wendy Bradley

Southern Methodist University (SMU) - Strategy & Entrepreneurship Department ( email )

6212 Bishop Blvd.
Dallas, TX 75205
United States

HOME PAGE: http://https://www.smu.edu/cox/Our-People-and-Community/Faculty/Wendy-Bradley

Julian Kolev (Contact Author)

United States Patent and Trademark Office ( email )

Alexandria
VA 22313-1451
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
275
Abstract Views
1,028
Rank
207,956
PlumX Metrics