Home bias in international innovation systems: The emergence of dominant designs in the electric vehicle industry

Abstract

The absence of a dominant design can impede the diffusion of environmental technologies. A certain degree of standardization is necessary so that firms are able to focus on process innovations that make the technology accessible to the masses. In this context, this paper studies how technological centrality and home bias in the innovation process influence the emergence of dominant designs in the mobility sector. An analysis of over 5000 electric-vehicle innovations shows that technological centrality hinders a dominant design from emerging. However, a bias in favor of innovations from the home continent mitigates this negative effect. Thus, innovations from East Asia do not consider European and U.S. innovations and vice versa. East Asian firms are different from both European and North American firms in how home bias affects the emergence of dominant designs. In East Asia, home bias has more impact on the emergence of dominant designs for central technologies than in other continents, while it has less impact for other technologies. Home bias is hence not only a firm-level mechanism, but also a helpful construct for the study of innovation systems. A lack of international standard cooperation might further influence future managerial and governmental decisions fostering developments towards cleaner technologies.