Collaboration in the Shadow of the Technology Frontier: Evidence from the Flat Panel Display Industry

Abstract

The literature on competition through innovation tends to emphasize the benefits of technological leadership. However, we explain why a capable firm might prefer to shadow the technology leader—remaining slightly behind rather than competing directly at the frontier. On the basis of a formal model and the competitive dynamics literature, we propose that the more benefits a firm gains from collaboration with a technological leader through licensing and supply agreements, the more likely the firm is to take a shadowing position. Our hypotheses, particularly regarding licensing from a technological leader, receive support from a large sample in the flat panel display industry. Copyright © 2014 John Wiley & Sons, Ltd.

Competition and innovation: The tango of the market and technology in the competitive landscape

“…The flat panel display industry has seen continuous generational changes of technology since the first commercial production of the flat panel in 1989 (Lee et al, ; Wang, Yang, & Miller, ). In what follows, we discuss two important aspects of this industry relevant to our theoretical constructs and empirical operationalization: technology progression and product application.…”