Dynamic competition in technological investments: An empirical examination of the LCD panel industry

Lee, Jeong-Sik; Kim, Byung-Cheol; Lim, Young-Mo

doi:10.1016/j.ijindorg.2011.03.006

Cited by 19 publications

(11 citation statements)

References 26 publications

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“…Likewise, the recent study by Lee et al . () supports the view that laggards try to catch up to the leaders. We point out that there is a choice besides leading for technologically capable firms.…”

Section: Discussionsupporting

confidence: 87%

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

2014

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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.

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Section: Discussionsupporting

confidence: 87%

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

2014

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“…Anticipating the outcome of the technology race, a firm may choose to hold off its technology advancement in spite of mounting competitive pressure from market and technology. Complementing to prior studies (Aghion et al, 2005;Lee et al, 2011;Lerner, 1997), with old ones, such as in hard disk drives (Christensen, 1997), dynamic random access memory chips (Kapoor & Adner, 2012), and semiconductors (Leiblein & Madsen, 2009;Madsen & Leiblein, 2015).…”

Section: Resultsmentioning

confidence: 90%

“…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.…”

Section: Methodsmentioning

confidence: 99%

“…On the other hand, market competition deincentivizes innovation because competition diminishes the value of innovation. The other research stream, with a particular focus on the effect of technology competition on innovation, has developed "racing" models to predict and explain why a firm proactively responds to technology competition (Barnett & McKendrick, 2004;Barnett & Sorenson, 2002;Lee, Kim, & Lim, 2011;Lerner, 1997). Although most studies embrace the proactive view of fending off technology competition, a few submit a note of caution concerning the risks involved in innovation (Szymanski, Kroff, & Troy, 2007).…”

Section: Competition and Innovationmentioning

confidence: 99%

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

Qian

Wang

2017

Manage Decis Econ

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Technology innovation can be a double‐edged sword in helping a firm to address competitive pressures. We explore the relationships among market competition, technology competition, and firms' advancement to a higher generation of production technology. Though market competition drives technology advancement as firms attempt to escape competition and technology competition also drives technology advancement as firms try to stay in the technology race, concurrent high market and technology competition lead a firm to defer advancement. We find supportive evidence with data on global flat panel display makers. Our findings shed light on how competition interacts with a firm's technology advancement decision and, in general, a firm's technology strategy.

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“…Requalification is typically less costly than initial qualification, but nevertheless can entail substantial ongoing investments in advance of bidding events, particularly in dynamic industries. For example, latest-generation fabrication plants often permit suppliers to achieve lower costs, ensure greater reliability, and/or produce a wider range of products; see the discussion of the LCD panel industry in Lee, Kim, and Lim (2011). As a result, purchasers may require permit strategic play by customers but restrict attention to equilibria that condition continuation paths only on past prices, and not on realized demand.…”

Section: The Modelmentioning

confidence: 99%

Price Cutting and Business Stealing in Imperfect Cartels

Bernheim

Madsen²

2017

American Economic Review

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Although economists have made substantial progress toward formulating theories of collusion in industrial cartels that account for a variety of fact patterns, important puzzles remain. Standard models of repeated interaction formalize the observation that cartels keep participants in line through the threat of punishment, but they fail to explain two important factual observations: first, apparently deliberate cheating actually occurs; second, it frequently goes unpunished even when it is detected. We propose a theory of equilibrium price cutting and business stealing in cartels to bridge this gap between theory and observation. (JEL D43, L12, L13)

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Dynamic competition in technological investments: An empirical examination of the LCD panel industry

Cited by 19 publications

References 26 publications

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

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

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

Price Cutting and Business Stealing in Imperfect Cartels

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