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Market Entry by High Technology Startups: The Effect of Competition Level and Startup Innovativeness

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  • Niron Hashai

    (Arison School of Business, The Interdisciplinary Center, Herzliya 4610101, Israel; and Jerusalem School of Business Administration, The Hebrew University of Jerusalem, 9190501 Jerusalem, Israel)

  • Sarit Markovich

    (Kellogg School of Management, Northwestern University, Evanston, Illinois 60201)

Abstract

We study the level of market competition as a determinant for the propensity of cooperation between startups entering new markets and incumbents operating in these markets. We provide ample empirical evidence suggesting that startups and incumbents are more likely to cooperate in the commercialization of startups’ technological innovations in markets with either high or low competition levels than in markets with moderate competition levels. Importantly, we further show that startups’ innovativeness has a contingent effect—it encourages cooperation at low-to-moderate levels of competition, but encourages competition at moderate-to-high levels of competition.

Suggested Citation

  • Niron Hashai & Sarit Markovich, 2017. "Market Entry by High Technology Startups: The Effect of Competition Level and Startup Innovativeness," Strategy Science, INFORMS, vol. 2(3), pages 141-160, September.
    • Handle: RePEc:inm:orstsc:v:2:y:2017:i:3:p:141-160
    DOI: 10.1287/stsc.2017.0033
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