Research Notes and Commentaries
Entry into new niches: the effects of firm age and the expansion of technological capabilities on innovative output and impact
Article first published online: 14 JAN 2011
Copyright © 2011 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 32, Issue 9, pages 1011–1024, September 2011
How to Cite
Kotha, R., Zheng, Y. and George, G. (2011), Entry into new niches: the effects of firm age and the expansion of technological capabilities on innovative output and impact. Strat. Mgmt. J., 32: 1011–1024. doi: 10.1002/smj.915
- Issue published online: 7 JUL 2011
- Article first published online: 14 JAN 2011
- Accepted manuscript online: 3 JAN 2011 10:18AM EST
- Manuscript Revised: 1 DEC 2010
- Manuscript Received: 7 MAR 2008
- Advanced Institute of Management (AIM) Innovation Fellowship. Grant Number: ESRC RES 331-27-0011
We provide evidence that young firms systematically differ from older firms in their innovative output when they enter ‘new to the firm’ technological niches. We analyze data from 128 biotechnology firms since their inception and track these firms over time. Our analyses reveal that the organizational age at which the firm branches into new technological niches significantly influences its innovative activity. We refine the focus of the extant literature by separately examining the effects of branching on the quantity of innovative output and the impact that this output has on the technology domain. Subsequent to branching into new niches, we find that older firms have a higher quantity of output than their younger counterparts, whereas young firms tend to outpace their older rivals with higher impact. We discuss the implications of these findings for the literature on dynamic capabilities and entrepreneurship. Copyright © 2011 John Wiley & Sons, Ltd.