Abstract
In this paper, we reexamine the efficacy of redundant investment strategy and late entrance as a risk-hedging mechanism at the context of technological uncertainty, competition for an industry-wide dominance. Unlike recent findings against the effectiveness of such risk-hedging mechanisms, we identified a positive impact of dual investments by late entrants. In an early stage of a nascent industry when multiple (e.g. four or five) technologies competes, a dual investment strategy might not work. Later when the competition for dominance becomes a competition between two technologies, however, dual investments into the two technologies turns out effective. We also found that a business group structure contributes to managing complexity caused by dual investments. A semi-market structure institutionalized within a business group is effective in striking an optimal balance between internal competition and cooperation within the boundary of the firm.
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