Entry into Nascent Industries: Disentangling a Firm's Capability Portfolio at the Time of Investment Versus Market Entry

Abstract

This paper examines the capability antecedents of firm entry into nascent industries. Because a firm’s technological investments in nascent industries typically take place at a time before market entry, this study makes a distinction between capability requirements at the time of market entry versus initial investment. At the time of market entry, core technical capabilities and complementary assets influence the likelihood of entry. However, at the time of investment, a firm’s integrative capabilities as well as the initial stocks of related technical capabilities and complementary assets become critical, as they enable endogenous development of core technical capabilities and complementary assets by the time of entry. The empirical context is the population of firms involved in field experiments in agricultural biotechnology during 1980-2010.