INNOVATION AND PERFORMANCE DURING THE EVOLUTION OF COMPLEMENTARY TECHNOLOGIES

Abstract

This dissertation examines how complementary technologies affect product commercialization and performance of innovating firms. I ask two questions: (1) How do complementary technologies affect a firm’s returns to innovation in a focal product? (2) How do complementary technologies influence changes in a firm’s product portfolio? In answering the first question, I suggest that a firm’s innovation in a focal product will yield greater commercial benefits when complementary technologies of the focal product deliver more value to users of the focal product. For the second question, I suggest that diversity in complementary technologies of an incumbent firm’s existing product creates an inducement for the incumbent to launch new, related products. Based on these two core ideas, I develop multiple hypotheses and test them in the context of the global mobile device industry, using hand-collected data. Overall, the dissertation extends our understanding of strategic implications of demand-related challenges in complementary technologies.