The impact of pre-entry experiences on entry decisions and firm survival

Publication date: Available online 2 August 2018Source: Technological Forecasting and Social ChangeAuthor(s): KwangWook GangAbstractA successful transition from existing submarkets to newly emerged submarkets is critical to explain a firm's survival in an industry. One stream of prior literature has focused on the role of prior experience in successful market transitions and firm survival. Unfortunately, previous studies have arrived at inconsistent results. In this paper, we explore the issue by investigating firm entry strategies in the magnetic tape drive industry from 1983 to 2002. We find that the number of years spent in the magnetic tape drive industry has a negative impact on new submarket entries and entry timing but a positive impact on firm survival. Previous submarket entry experience positively enhances new submarket entry and entry timing. Product introductions in prior submarkets have positive impacts on submarket entry and entry timing, whereas in the current submarket, product introductions are positively associated with firm survival.

Source: Technological Forecasting and Social Change - August 2, 2018 Category: Science Source Type: research