A persistent theme in the academic literature on technological innovation is that incumbent enterprises have great difficulty crossing the abyss created by a radical technological innovation. It is argued that incumbents go into decline, while new entrants rise to market dominance by exploiting...

In this work, we explore the relations between sales growth and a set of innovation indicators that capture the different sources, modes and results of the innovative activity undertaken within firms. We exploit a rich panel on innovation activity of Spanish manufacturing firms, reporting...

This paper attempts to investigate which scheme of technology development is desirable in the stream of cumulative innovation, in particular, with uncertainty on the part of follow-on innovation. Technology competition is likely to generate social overincentives for innovation especially when...

We examine antecedents of knowledge recombination and technological breakthroughs. Conceptualizing exploration as a combinatory search of prior new-recombination (an original technology component), we juxtapose contrasting effects of the boundary in which firms search for prior new-recombination...

Innovation is one of the usual suspects in defining differences in performance among firms, according to a strong and diverse theoretical framework. Understanding the diversity that exists within the population of innovative firms is essential to elaborate appropriate innovation policies. Our...

In this paper we analyze an inter-temporal optimization problem of a representative firm that invests in horizontal and vertical innovations and that faces a constraint with respect to total R&D spending. We find that there can exist two different steady-states of the economy when the amount of...

This article investigates whether firms react to a radical technological substitution threat by a deliberate acceleration of innovation in their existing technology - the 'sailing ship effect'. There have been repeated claims that the effect has been significant as a source of innovation...

This paper analyzes the choice between different innovation activities of a firm. In particular, we study the technology acquisition decision of the firm, i.e. its technology BUY decision as part of the firm's innovation strategy. We take a closer look at the different types of external...

Highly innovative products fail in the marketplace at significant rates. In this paper, we offer a behavioral framework to explain this failure. We begin with the behavior change inherent in most innovations. We then add reference dependence and loss aversion, arguing that the typical consumer...