The Impact of Participation within Formal Standardization on Firm Performance

Abstract

Several studies highlight the economic benefits of standards, while the benefit of taking part in standardization remains a rather unexplored mystery to date. In theory, standard setters not only benefit from the possibility to monitor and shape the development of standards but also access a wide range of knowledge sources in the standards committee. Therefore, we investigate how the participation within formal standardization is related to the performance of 1561 German companies. A Cobb-Douglas production function is estimated in order to use the Solow-residuals as indicator for the firm performance. Participation within formal standardization is measured by the number of committee seats at the German Institute for Standardization (DIN). Our results suggest that participation within formal standardization is positively related to firm performance in the manufacturing sector. In the service sector, no clear evidence for such a relationship is found. This finding also holds true when we test if a service providers' intellectual property is well protected through patents.

Standardization Alliance Networks, Standard‐Setting Influence, and New Product Outcomes*

“…Previous research suggests that new product development performance depends on a firm's ability to manage and create knowledge (Cohen and Levinthal, 1990;Smith, Collins, and Clark, 2005). To successfully introduce products and services, organizations must pay attention to both product component knowledge improvements and changes in standards (technical criteria and interactions between component knowledge) from such improvements (Wakke, Blind, and Ramel, 2016). Thus, a firm's standard-setting influence, which determines the extent to which the published formal standards fit the firm's preference, can help explain the role of network position in new product development.…”

“…Firms cannot benefit as much from defining a technical specification favorable to themselves when their primary purpose is to improve the new product introduction rate. First, formal standards, which are available to all firms, are codified, and unified knowledge about the proper functioning of products are less beneficial for innovation opportunity recognition (Wakke et al, 2016). Second, the more influence that firms have in standard setting the higher the likelihood of consistency between industry standards and their current technical systems (Leiponen, 2008).…”

Unpacking 3GPP standards

“…Cohen‐Meidan () used data on membership in the IEEE 802.14 committee and a competing informal consortium to study the effect of competing standards on firm valuation. Wakke and Blind () used the number of seats that a firm holds in the German national standards body DIN to measure the effect of participation in standardization on a firm's productivity. Ranganathan and Rosenkopf () collected data on firm votes on 242 ballots held at the International Committee for Information Technology Standards (INCITS) to analyze the effects of R&D and commercialization alliances on the likelihood that a firm supports another firm'sproposal…”

“… a BGS2015 = Baron, Gupta, and Spulber (); BK2013 = Beckers and Kang (); BL2014 = Bar and Leiponen (); CM2007 = Cohen‐Meidan (); FW2009 = Fleming and Waguespack (); GGG2004 = Gandal, Gantman, and Genesove (); KM2015 = Kang and Motohashi (); L2008 = Leiponen (); RMG2001 = Rosenkopf, Metiu, and George (); RR2014 = Ranganathan and Rosenkopf (); S2012 = Simcoe (); WB2012 = Wakke and Blind (); WFJ2014 = Wen, Forman, and Jarvenpaa ().…”

Born Global standard establishers identification of a new research field and contribution to network theory

“…The focus of this paper was on de facto standards. Based on the advantages standardization may offer according de Vries (2006), Blind and Gauch (2007), Blind (2009), Swann (2000 as well as Wakke and Blind (2012) the investigation of international formal standards by BGs offers another unexplored research field. Given the fact that BG standard establishers reflect BG topics and standardization topics, common research of BG researchers and standardization researchers is recommended.…”