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Coordinating and competing in ecosystems: How organizational forms shape new technology investments

Authors

  • Rahul Kapoor,

    Corresponding author
    • The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, U.S.A. Krannert School of Management, Purdue University, West Lafayette, Indiana, U.S.A.
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  • Joon Mahn Lee

    1. The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, U.S.A. Krannert School of Management, Purdue University, West Lafayette, Indiana, U.S.A.
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Rahul Kapoor, The Wharton School, University of Pennsylvania, Philadelphia, PA 19 104, U.S.A. E-mail: kapoorr@wharton.upenn.edu

Abstract

We consider firms in the context of their business ecosystems and explore how differences in the ways in which firms are organized with respect to complementary activities affect their decision to invest in new technologies. We argue that, in addition to creating differences in incentives and bureaucratic costs, firm-complementor organizational form plays an important role in the firm's ability to coordinate accompanying changes in complementary activities so as to shape the benefits from investing early in the new technology. We test our predictions in the U.S. healthcare industry from 1995–2006. The study makes a strong case for viewing firms' competitive strategies in the context of their business ecosystems and for the existence of an important link between firms' coordination choices and their strategic investments. Copyright © 2012 John Wiley & Sons, Ltd.

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