Issue: Summer 1997
Pages: pp. 228-247
Authors: Josh Lerner
Title: An Empirical Exploration of a Technology Race
Abstract: An extensive theoretical literature examines technological competition, and in particular whether leaders maintain their standing. These models, however, have received little empirical support. I examine innovation in the disk drive industry, an environment particularly conducive to identifying racing behavior. Strategic variables prove significant in explaining the decision to innovate. The patterns are in accord with Reinganum's work: firms that trail the leader innovate more. I add controls for technological opportunity, financing constraints, and firm turnover. When firms manufacture drives for internal use or there are many entrants, and strategic interactions may be less important, the effects are less pronounced.
Innovation and Invention: Processes and
Incentives (O310)
Microelectronics; Computers; Communications
Equipment (L630)
Technological Change and Innovation (6211)
Industry
Studies--Manufacturing--Machinery (tools, electrical equipment,
computers, communication equipment, and appliances) (6313)