IDEAS home Printed from https://ideas.repec.org/p/zbw/esprep/300544.html
   My bibliography  Save this paper

Technical newness: Putting a spotlight on its dynamic nature and effects

Author

Listed:
  • Talke, Katrin
  • Müller, Sebastian
  • Wieringa, Jaap E.

Abstract

Differentiating products by means of novel technical features is an accepted approach to achieving and retaining long-term success. So far, innovation research has treated technical newness as a static concept. In this paper, we introduce a dynamic perspective and enhance the technical newness concept in three ways. First, we acknowledge that customers become accustomed to a product and perceive it as less new as time goes by. Second, we consider product updates that introduce new features and functionalities across a product’s life cycle. Third, we uncover how technical newness affects the sales performance of new products over time. We track 175 cars over their life cycle, and find that the effect of technical newness takes an inverted-U shape. Our results imply that a dynamic perspective is crucial both when assessing a product’s technical newness and when analyzing its performance impact.

Suggested Citation

  • Talke, Katrin & Müller, Sebastian & Wieringa, Jaap E., 2024. "Technical newness: Putting a spotlight on its dynamic nature and effects," EconStor Preprints 300544, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:300544
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/300544/1/Talke-Technical-newness.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nadiri, M Ishaq & Prucha, Ingmar R, 1996. "Estimation of the Depreciation Rate of Physical and R&D Capital in the U.S. Total Manufacturing Sector," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 43-56, January.
    2. Ariél Pakes & Zvi Griliches, 1984. "Estimating Distributed Lags in Short Panels with an Application to the Specification of Depreciation Patterns and Capital Stock Constructs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(2), pages 243-262.
    3. Hubert Gatignon & Michael L. Tushman & Wendy Smith & Philip Anderson, 2002. "A Structural Approach to Assessing Innovation: Construct Development of Innovation Locus, Type, and Characteristics," Management Science, INFORMS, vol. 48(9), pages 1103-1122, September.
    4. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    5. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    6. Warren J Bilkey & Erik Nes, 1982. "Country-of-Origin Effects on Product Evaluations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 13(1), pages 89-100, March.
    7. Lee, Seunghyun & Ha, Sejin & Widdows, Richard, 2011. "Consumer responses to high-technology products: Product attributes, cognition, and emotions," Journal of Business Research, Elsevier, vol. 64(11), pages 1195-1200.
    8. Bessen, James, 2008. "The value of U.S. patents by owner and patent characteristics," Research Policy, Elsevier, vol. 37(5), pages 932-945, June.
    9. Kock, Alexander & Gemünden, Hans Georg & Salomo, Søren & Schultz, Carsten, 2011. "The Mixed Blessings of Technological Innovativeness for the Commercial Success of New Products," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 63285, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    10. Cincera, Michele & Veugelers, Reinhilde, 2014. "Differences in the rates of return to R&D for European and US young leading R&D firms," Research Policy, Elsevier, vol. 43(8), pages 1413-1421.
    11. Talke, Katrin & Salomo, Søren & Kock, Alexander, 2011. "Top ManagementTeam Diversity and Strategic Innovation Orientation: The Relationship and Consequences for Innovativeness and Performance," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 63286, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    12. Chaney, Paul K & Devinney, Timothy M & Winer, Russell S, 1991. "The Impact of New Product Introductions on the Market Value of Firms," The Journal of Business, University of Chicago Press, vol. 64(4), pages 573-610, October.
    13. Clark, Kim B., 1985. "The interaction of design hierarchies and market concepts in technological evolution," Research Policy, Elsevier, vol. 14(5), pages 235-251, October.
    14. Mark Simon & B. Elango & Susan M. Houghton & Sonia Savelli, 2002. "The Successful Product Pioneer: Maintaining Commitment while Adapting to Change," Journal of Small Business Management, Taylor & Francis Journals, vol. 40(3), pages 187-203, July.
    15. Belenzon, Sharon & Patacconi, Andrea, 2013. "Innovation and firm value: An investigation of the changing role of patents, 1985–2007," Research Policy, Elsevier, vol. 42(8), pages 1496-1510.
    16. Meyers-Levy, Joan & Tybout, Alice M, 1989. "Schema Congruity as a Basis for Product Evaluation," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(1), pages 39-54, June.
    17. Sendil K. Ethiraj & Daniel Levinthal & Rishi R. Roy, 2008. "The Dual Role of Modularity: Innovation and Imitation," Management Science, INFORMS, vol. 54(5), pages 939-955, May.
    18. Druehl, Cheryl T. & Schmidt, Glen M. & Souza, Gilvan C., 2009. "The optimal pace of product updates," European Journal of Operational Research, Elsevier, vol. 192(2), pages 621-633, January.
    19. Chao, Paul, 1998. "Impact of Country-of-Origin Dimensions on Product Quality and Design Quality Perceptions," Journal of Business Research, Elsevier, vol. 42(1), pages 1-6, May.
    20. Schott, Kerry, 1976. "Investment in Private Industrial Research and Development in Britain," Journal of Industrial Economics, Wiley Blackwell, vol. 25(2), pages 81-99, December.
    21. Peter N. Golder & Gerard J. Tellis, 1997. "Will It Every Fly? Modeling the Takeoff of Really New Consumer Durables," Marketing Science, INFORMS, vol. 16(3), pages 256-270.
    22. Bettman, James R & Luce, Mary Frances & Payne, John W, 1998. "Constructive Consumer Choice Processes," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 25(3), pages 187-217, December.
    23. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, April.
    24. Bosworth, D L, 1978. "The Rate of Obsolescence of Technical Knowledge-A Note," Journal of Industrial Economics, Wiley Blackwell, vol. 26(3), pages 273-279, March.
    25. Huang, Shu-Chin, 2013. "Capital outflow and R&D investment in the parent firm," Research Policy, Elsevier, vol. 42(1), pages 245-260.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rahul Kapoor & Ron Adner, 2012. "What Firms Make vs. What They Know: How Firms' Production and Knowledge Boundaries Affect Competitive Advantage in the Face of Technological Change," Organization Science, INFORMS, vol. 23(5), pages 1227-1248, October.
    2. Verlegh, Peeter W. J. & Steenkamp, Jan-Benedict E. M., 1999. "A review and meta-analysis of country-of-origin research," Journal of Economic Psychology, Elsevier, vol. 20(5), pages 521-546, October.
    3. Nicholas Burton & Peter Galvin, 2020. "Component complementarity and transaction costs: the evolution of product design," Review of Managerial Science, Springer, vol. 14(4), pages 845-867, August.
    4. Gaétan de Rassenfosse & Adam B. Jaffe, 2017. "Econometric Evidence on the R&D Depreciation Rate," NBER Working Papers 23072, National Bureau of Economic Research, Inc.
    5. Chinloy, Peter & Jiang, Cheng & John, Kose, 2020. "Investment, depreciation and obsolescence of R&D," Journal of Financial Stability, Elsevier, vol. 49(C).
    6. John Hauser & Gerard J. Tellis & Abbie Griffin, 2006. "Research on Innovation: A Review and Agenda for," Marketing Science, INFORMS, vol. 25(6), pages 687-717, 11-12.
    7. Simonson, Itamar & Drolet, Aimee L., 2003. "Anchoring Effects on Consumers' Willingness-to-Pay and Willingness-to-Accept," Research Papers 1787, Stanford University, Graduate School of Business.
    8. Scaringella, Laurent & Burtschell, François, 2017. "The challenges of radical innovation in Iran: Knowledge transfer and absorptive capacity highlights — Evidence from a joint venture in the construction sector," Technological Forecasting and Social Change, Elsevier, vol. 122(C), pages 151-169.
    9. Yang, Chia-Hsuan & Nugent, Rebecca & Fuchs, Erica R.H., 2016. "Gains from others’ losses: Technology trajectories and the global division of firms," Research Policy, Elsevier, vol. 45(3), pages 724-745.
    10. Lijia Shi & Lisa A. House & Zhifeng Gao, 2013. "Impact of Purchase Intentions on Full and Partial Bids in BDM Auctions: Willingness-to-pay for Organic and Local Blueberries," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 707-718, September.
    11. Sanjith Gopalakrishnan & Moksh Matta & Hasan Cavusoglu, 2022. "The Dark Side of Technological Modularity: Opportunistic Information Hiding During Interorganizational System Adoption," Information Systems Research, INFORMS, vol. 33(3), pages 1072-1092, September.
    12. Chaudhuri, Arjun & Ligas, Mark, 2009. "Consequences of Value in Retail Markets," Journal of Retailing, Elsevier, vol. 85(3), pages 406-419.
    13. Kick, Markus, 2015. "The Price Premium Induced by Branding: A Health Care Case Study," EconStor Preprints 182504, ZBW - Leibniz Information Centre for Economics.
    14. Gawer, Annabelle, 2014. "Bridging differing perspectives on technological platforms: Toward an integrative framework," Research Policy, Elsevier, vol. 43(7), pages 1239-1249.
    15. Daniel A. Levinthal & Maciej Workiewicz, 2018. "When Two Bosses Are Better Than One: Nearly Decomposable Systems and Organizational Adaptation," Organization Science, INFORMS, vol. 29(2), pages 207-224, April.
    16. Sendil K. Ethiraj & Daniel Levinthal, 2009. "Hoping for A to Z While Rewarding Only A: Complex Organizations and Multiple Goals," Organization Science, INFORMS, vol. 20(1), pages 4-21, February.
    17. Philippe Moati & El Mouhoud Mouhoub, 2005. "Les nouvelles logiques de décomposition internationale des processus productifs," Revue d'économie politique, Dalloz, vol. 115(5), pages 573-589.
    18. Kivetz, Ran & Simonson, Itamar, 2003. "The Role of Effort Advantage in Consumer Response to Loyalty Programs: The Idiosyncratic Fit Heuristic," Research Papers 1738r, Stanford University, Graduate School of Business.
    19. Chisik, Richard, 2003. "Export industry policy and reputational comparative advantage," Journal of International Economics, Elsevier, vol. 59(2), pages 423-451, March.
    20. Mohsen Jafari Songhori & Madjid Tavana & Takao Terano, 2020. "Product development team formation: effects of organizational- and product-related factors," Computational and Mathematical Organization Theory, Springer, vol. 26(1), pages 88-122, March.

    More about this item

    Keywords

    Technology life cycle; Technological Change; Management of Technological Innovation;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:esprep:300544. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.