First-mover Advantage Research Articles

Do First-Movers in Marketing Sustainable Products Enjoy Sustainable Advantages? A Seven-Country Comparative Study

The literature suggests that first-movers enjoy sustainable competitive advantages but suffer some disadvantages. The timing of new product introduction is a major decision for executives who are concerned about sustainability issues. These executives must simultaneously strive for environmental protection, social welfare, the timing of product introduction, and the economic viability of decisions. However, few academic studies have examined how executives balance sustainable first-mover advantages and sustainable development goals in order to achieve sustainable organizational growth and performance. This study develops nine research hypotheses to examine what sustainable advantages first-movers gain by being first to market sustainable products in five industries that are important for advancing sustainable development goals. Using data collected from 1437 executives who are concerned about sustainability issues in seven countries, this study uses Duncan multiple-range tests to examine cross-national similarities and differences between Asian and Western countries. The study results reveal some interesting cross-national similarities and differences. The cross-national differences suggest some competing and signaling strategies for sustainable enterprise development. This study contributes to the existing cross-national research on first-mover advantages, provides a richer understanding of how executives who are concerned about sustainability issues perceive sustainability first-mover advantages and disadvantages, and further expands the theory of sustainable innovation and entrepreneurship.

Expected Bond Liquidity

We introduce an approach to forecast individual bond liquidity and apply it to the U.S. corporate bond market. Our model combines three dynamic prediction models to get the most accurate estimate for future bond liquidity. We compare the new prediction methodology with the literature’s current approach to use a bond’s liquidity of today as the best estimate for its liquidity tomorrow. Our approach generates significantly lower forecasting errors and is much better able to capture the premium for expected liquidity in bond yields. We provide evidence that investors in corporate bond funds actively anticipate liquidity deterioration in underperforming funds and sell their shares in advance to secure a first-mover advantage.

تفكيك تأثير تكلفة التحويل على وجود ميزة المبادر الأول: دليل من الكويت

هدف الدراسة: تهدف الدراسة إلى فصل تأثير تكلفة تحويل العملاء بوصفة آلية عزل تؤدي إلى ميزة المبادر الأول في أسواق مقدمي الخدمات في دولة الكويت. تصميم/ منهجية/ طريقة الدراسة: اعتمدت الدراسة على المنهج التجريبي وبيانات أولية ومسحية، وقد تم تحليل البيانات باستخدام تحليل العامل التأكيدي وتحليل المعادلات الهيكلية. عينة الدراسة وبياناتها: استخدمت الدراسة بيانات حول 106 شركات في أربع أسواق خدمية وبيانات أولية لعينة عشوائية من 968 عميلاً حالياً لأسواق الخدمات تحت الدراسة. نتائج الدراسة: وجدت الدراسة أن تكاليف تحويل العملاء تعمل بوصفها آلية وسيطة تساعد في تفسير وجود ميزة المبادر الأول، وتظهر نتائج الدراسة أن هناك ستة أبعاد لتكلفة التحويل (التحويل المسبق لتكاليف البحث والتقييم، وتكاليف فقدان الأداء، وتكاليف عدم اليقين، والتكاليف السلوكية والمعرفية بعد التبديل، وتكاليف الغرق، وتكاليف الإعداد)، تعمل على ربط العميل بالمبادر الأول الذي دخل السوق مبكرا. أصالة الدراسة: تقدم هذه الدراسة دليلاً تجريبياً على أن تأثير المبادر الأول المباشر واضح في أسواق الخدمات في الكويت، كما تفكك الدراسة أيضاً دور تكلفة تحويل العملاء بوصفها وسيطاً، وتكشف عن أبعاد تكلفة التحويل التي تشرح كيف يمكن لتوقيت دخول السوق أن يولِّد ميزة تنافسية. حدود الدراسة وتطبيقاتها: يجب على رواد الأعمال والداخلين المحتملين إلى السوق ألا يأخذوا في الاعتبار الدور العام لتكاليف تحويل العملاء في تحديد الوقت المناسب لدخول السوق فقط، ولكن يتحتم عليهم أيضا أن يأخذوا في الاعتبار التأثيرات المختلفة لكل بعد من أبعاد تكلفة تحويل العملاء على حماية ميزة المبادر الأول. إن البحث التجريبي للدور متعدد الأوجه لتكلفة تحويل العميل في تحقيق ميزة المبادر الأول في المنطقة العربية يدعم صنع السياسات العامة لتطوير بيئة ريادة الأعمال المحلية وسياسات مكافحة الاحتكار التي تسمح بدخول مشاريع ناشئة ونجاحها في الأسواق التي تهيمن عليها الشركات الموجودة.

Strategic dual-channel pricing games with e-retailer finance

Small and medium-sized enterprises (SMEs) often face obstacles in reaching consumers and obtaining sufficient capital for their production and operations processes. Owning channel advantages and rich transaction data regarding suppliers’ sales, inventory, and credits, e-commerce platforms (henceforth, e-retailers) can offer online distribution channels and online financing service for SMEs to facilitate their distribution and alleviate their capital constraints. This study analyzes the pricing competition in a dual-channel supply chain consisting of one capital-constrained supplier and one e-retailer providing finance. The supplier can sell her products either through the e-retailer using the online channel or through her direct offline channel. The e-retailer offers finance to the supplier if she is capital-constrained. We examine the equilibrium price and the associated optimal quantity and profits in dual channels when supplier may face capital constraint and compete with e-retailer horizontally or vertically. We find that e-retailer finance is a value-added service for e-retailer and that the increased profits generated from financing offerings can offset the lowered revenue in the online distribution channel. E-retailer finance can increase market share, which also benefits the supplier. Participating in the vertical competition through announcing pricing decisions earlier than does the supplier can help the e-retailer seize the first-mover advantage. Further, we present the value of e-retailer finance and examine the impact of various financing, operational, and consumer-related factors on pricing and channel structure. We also provide guidelines for e-retailers and financing-constrained suppliers to utilize e-retailer finance to optimize their dual-channel structure and to make optimal pricing decisions.

A leader-follower model for discrete competitive facility location problem under the partially proportional rule with a threshold.

When consumers are faced with the choice of competitive chain facilities that offer exclusive services, current rules do not properly describe the behavior pattern of these consumers. To eliminate the gap between the current rules and this kind of customers behavior pattern, the partially proportional rule with a threshold is proposed in this paper. A leader-follower model for discrete competitive facility location problem is established under the partially proportional rule with a threshold. Combining with the greedy strategy and the 2-opt strategy, a heuristical algorithm (GFA) is designed to solve the follower's problem. By embedding the algorithm (GFA), an improved ranking-based algorithm (IRGA) is proposed to solve the leader-follower model. Numerical tests show that the algorithm proposed in this paper can solve the leader-follower model for discrete competitive facility location problem effectively. The effects of different parameters on the market share captured by the leader firm and the follower firm are analyzed in detail using a quasi-real example. An interesting finding is that in some cases the leader firm does not have a first-mover advantage.

Ownership in cross-border acquisitions and entry timing of the target firm

We examine how the entry timing of targets influences the initial and the post-entry percentage of ownership acquired by multinationals. We argue that targets that have entered earlier into the market launch signals of lower uncertainty in contexts where first-mover advantages exist. As a consequence, multinationals are willing to buy higher levels of ownership in these early entrant targets and to increase their participation in the subsidiary equity in the post-entry stage. Finding support for these relationships, we study how market age and innovative behaviour of the target reduce the importance of leading time as determinant of the ownership decision.

The Impacts of Telematics on Competition and Consumer Behavior in Insurance

Recent technological innovations allow insurance providers to closely monitor and collect detailed data on their customers’ behaviors. Such innovations offer potential benefits by mitigating moral-hazard problems but may provide the incumbent with a lasting first-mover advantage, which may harm consumers. We investigate these outcomes in the context of pay-how-you-drive (PHYD) auto insurance, which offers tailored discounts to drivers monitored by telematics devices. We exploit the staggered entry of PHYD insurance across states and insurers in a difference-in-differences framework. While innovating firms experience initial profit increases, the profits are eroded by entry, which suggests that this innovation does not raise novel antitrust concerns. Furthermore, we find a meaningful impact of PHYD programs on fatal car accidents. Our findings are consistent with impacts implied by canonical theoretical models.

Swing Pricing and Fragility in Open-end Mutual Funds

How to prevent runs on open-end mutual funds? In recent years, markets have observed an innovation that changed the way open-end funds are priced. Alternative pricing rules (known as swing pricing) adjust funds’ net asset values to pass on funds’ trading costs to transacting shareholders. Using unique data on investor transactions in U.K. corporate bond funds, we show that swing pricing eliminates the first-mover advantage arising from the traditional pricing rule and significantly reduces redemptions during stress periods. The positive impact of alternative pricing rules on fund flows reverses in calm periods when costs associated with higher tracking error dominate the pricing effect.

Communications in Proxy Contests

This paper studies the communication of “voice” in shareholder activism. Using hand-collected data, I investigate how the use of investor presentations, among other communication strategies, affects the outcomes of proxy contests. Being the first to make presentations to investors increases the dissident’s chance of winning by 60 percent. To understand this first-mover advantage, I examine the allocation of investor attention and variation in investor sophistication. The evidence is consistent with an explanation of limited investor attention. The findings highlight the role of communication in corporate governance.

Competition in a dual-channel supply chain considering duopolistic retailers with different behaviours

<p style='text-indent:20px;'>We study competition in a dual-channel supply chain in which a single supplier sells a single product through its own direct channel and through two different duopolistic retailers. The two retailers have three competitive behaviour patterns: Cournot, Collusion and Stackelberg. Three models are respectively constructed for these patterns, and the optimal decisions for the three patterns are obtained. These optimal solutions are compared, and the effects of certain parameters on the optimal solutions are examined for the three patterns by considering two scenarios: a special case and a general case. In the special case, the equilibrium supply chain structures are analysed, and the optimal quantity and profit are compared for the three different competitive behaviours. Furthermore, both parametric and numerical analyses are presented, and some managerial insights are obtained. We find that in the special case, the Stackelberg game allows the supplier to earn the highest profit, the retailer playing the Collusion game makes the supplier earn the lowest profit, and the Stackelberg leader can gain a first-mover advantage as to the follower. In the general case, the supplier can achieve a higher profit by raising the maximum retail price or holding down the self-price sensitivity factor.

The end of military-techno Pax Americana? Washington’s strategic responses to Chinese AI-enabled military technology

This article uses the international relations (IR) ‘polarity’ concept as a lens to view the shifting great power dynamics in artificial intelligence (AI) and related enabling technologies. The article describes how and why great power competition is mounting in within several interrelated dual-use technological fields; why these innovations are considered by Washington to be strategically vital, and how (and to what end) the United States is responding to the perceived challenge posed by China to its technological hegemony. The following questions addressed in this paper fill a gap in the existing literature: Will the increasingly competitive U.S.-China relationship dominate world politics creating a new bipolar world order, as opposed to a multipolar one? Why does the U.S. view China’s progress in dual-use AI as a threat to its first-mover advantage? How might the U.S. respond to this perceived threat?

Optimal Investment Strategies for Competing Camps in a Social Network: A Broad Framework

We study the problem of optimally investing in nodes of a social network in a competitive setting, wherein two camps aim to drive the average opinion of the population in their own favor. Using a well-established model of opinion dynamics, we formulate the problem as a zero-sum game with its players being the two camps. We derive optimal investment strategies for both camps, and show that a random investment strategy is optimal when the underlying network follows a popular class of weight distributions. We study a broad framework, where we consider various well-motivated settings of the problem, namely, when the influence of a camp on a node is a concave function of its investment on that node, when a camp aims at maximizing competitor's investment or deviation from its desired investment, and when one of the camps has uncertain information about the values of the model parameters. We also study a Stackelberg variant of this game under common coupled constraints on the combined investments by the camps and derive their equilibrium strategies, and hence quantify the first-mover advantage. For a quantitative and illustrative study, we conduct simulations on real-world datasets and provide results and insights.

Dynamics of policy adoption with state dependence

We study the dynamics of policy diffusion when a first-moving jurisdiction that legalizes an activity reduces the probability of legalization in nearby later-acting jurisdictions. If a jurisdiction's firms can sell to neighboring residents, but if the good is competitively sold at every location, then policies converge: all jurisdictions legalize or all jurisdictions ban. If firms have some market power, and if the location of firms depends on the order of legalization, an early-adopting government may legalize, but an otherwise identical, but later-acting, neighboring government might not. This possible asymmetry is due to state dependence resulting from the initial distribution of firms following the first-mover's legalization. Empirically, counties that legalize the sale of fireworks first have more firework vendors just inside their border than counties that legalize later. Furthermore, counties have a longer duration to legalize fireworks if nearby counties have already adopted. State dependence resulting from a first-mover advantage contributes to the policy divergence of regulatory policies.

To move first or not to move first?

We have investigated the quantization of the multi-player Stackelberg game by proposing an asymmetric quantum entanglement operation. Due to the informational asymmetry between the leaders and followers in the Stackelberg model, it is more natural to have differential quantum entanglement in a multi-player quantum Stackelberg game. It is found that the profit functions considered in the multi-player Stackelberg model display interesting and intriguing patterns as functions of quantum entanglement parameters. In particular, differential quantum entanglement could cause the leaders to lose the first-mover advantage inherent in the classical Stackelberg model. This surprising feature raises an important question: “To move first or not to move first?”

Revenue generation capacity of college football programs during the 2008 global financial crisis

PurposeThe purpose of this paper is to analyse the effects of first-mover advantage (FMA) on revenue generation capacity (RGC) of US college football programmes during the 2008 global financial crisis.Design/methodology/approachThe study used archival data analysed quantitatively using non-parametric regression in the form of binary logistic regression. The study was then framed and interpreted by the resource-dependence theory.FindingsFMA was positively and statistically associated with donations, branding, media rights and ticket revenues, but not win–loss records. The binary logistic regression model was correctly classified at 82.1 per cent of the variance and indicated that branding and ticket revenues were mostly associated with FMA.Research limitations/implicationsThe study was delimited to public college football programmes in the USA during the 2008 global financial crisis.Practical implicationsThe findings indicated that despite the 2008 global financial crisis, FMA was positively associated with RGC but not win–loss records.Originality/valueThe study was pioneering in evaluating the effects of FMA as a source of competitive advantage in college football programmes during the challenging time of the 2008 global financial crisis.

Better Earlier than Longer: First-Mover Advantage in Social Commerce Product Information Competition

Social commerce (SC) is a rapidly emerging branch of e-commerce. Effective information spread is the critical element in increasing the sales volume in this industry. However, few studies have explored the underlying mechanism and corresponding winning strategies from the perspective of information spread. This research fills the gap by using a simulation method. Combined with the Engel–Kollat–Blackwell (EKB) theory, we improved the Susceptible–Infected–Recovered (SIR) epidemic dissemination dynamic model to simulate the competitive information spread process on social commerce networks. Datasets collected from two of the biggest SC websites in China, Sina Weibo and Taobao, verified the accuracy of the proposed model. Parameter sensitivity analysis results indicated that releasing the product message earlier is more effective than increasing the spread duration for improving the performance of information diffusion so as to boost the sales volume. It was also shown that high discard probability destroys the sales volume caused by high purchase probability. Low discard probability can lead to a good sales volume eventually, even when the purchase probability is low. The results provide evidence for the First-Mover Advantage theory from the information spreading point of view. We come up with practical strategies for SC marketers based on the simulation results.

Understanding internationalisation approaches and mechanisms of diaspora entrepreneurs in emerging economies as a learning process

Purpose The purpose of this paper is to present an exploration into the internationalisation approaches and mechanisms of diaspora entrepreneurs in emerging economies. It seeks to conceptualise the strategies as a learning process. Design/methodology/approach The research is qualitative using a case study approach involving in-depth semi-structured interviews conducted longitudinally. Findings The findings suggest that diaspora entrepreneurs adopt mostly the network or, in some cases, the international new venture (born-global) market entry approach rather than the traditional stage by stage approach. The findings also suggest that diaspora entrepreneurs have perceived advantages over domestic small- and medium-sized enterprises (SMEs) because of their foreign exposure which has influenced their entrepreneurial behaviour in exploiting business opportunities. Practical implications The main implication of the study is that entrepreneurs who are beginning to internationalise their activities should seek to exploit potential first-mover advantages in emerging economies by realising an approach of internationalisation at high speed. Originality/value The paper contributes to better understanding of the diaspora entrepreneurship and its dynamics.

Strategic behavioral pricing of the private residential development market – a simplified experimental approach

PurposeThis paper aims to examine the behavior of “rational” residential developers, under game theory, for their pricing strategy in a competitive environment.Design/methodology/approachResults show that residential developers cooperate implicitly for long-term benefit, leading to a slow-down in sales. Developers are motivated to deviate from cooperating at the beginning and at the end of successive periods in a sub-market. Relatively high profits, earnable in the first few periods, provide an allowance to undercut prices and improve sales. For the last few periods, the punishment for any deviation from cooperating is insignificant or zero. Note that the first-mover advantage in a new market is evident. On the effect of uncertainty on the developer’s residential prices, results show that as uncertainty increases, prices decrease while price variability increases.Research limitations/implicationsThis study highlights the merits of a uniquely simplified experimental research design for the strategic behavioral pricing of the private residential development market using a game theoretic approach.Practical implicationsThis study enhances the understanding of the residential development strategy of developers in the residential development market.Originality/valueThere is limited research on pricing strategy for the private residential development market in Asia.

Why was Schumpeter not more concerned with patents?

Although Schumpeter is widely acknowledged as a pioneer of the economic analysis of innovation and although the patent system occupies an important place today in this field of research, Schumpeter did not see patents as playing a key role for fostering innovation. He mentioned them only a couple of times, in passing, and never developed any scientific analysis of the patent system. In this paper, we propose an explanation of this blind spot based on three characteristics of Schumpeter’s thought: first, entrepreneurs are largely motivated by non-monetary elements; second, they enjoy a first-mover advantage because imitation is difficult; third, Schumpeter viewed the innovation process as a relentless race in which firms are doomed to innovate in order to avoid disappearing. The Schumpeterian view of the economic process therefore largely reduces the economic importance of patents.

How Can Exploratory and Exploitative Innovation Affect NPD Speed and NPD Quality?

With the increasing significance of the success of NPD, the related literature stream begins to investigate the factors involved in the success of NPD and the antecedents of the success of NPD. High speed of NPD can help enterprises to gain first-mover advantages in the early marketplace. High quality of NPD can help enterprises to produce unique and reliable products that can meet customers’ needs. Thus, this study chooses NPD speed and NPD quality representing for the success of NPD. Beyond prior antecedents about internal and external resources derived from resource-based view, little research has examined the role of enterprise innovations as antecedents of NPD speed and NPD quality. Furthermore, little research has investigated the moderating role of characteristics of TMT members in the process of NPD. Based on knowledge-based view and attention-based view, this study investigates how exploratory innovation and exploitative innovation affect the NPD speed and NPD quality and the moderating role of TMT polychronicity. The eight hypotheses are proposed and tested in this study through the data of one hundred and eighty nine enterprises in China. The results indicate that exploratory innovation promotes NPD speed and NPD quality. Exploitative innovation also promotes both NPD speed and NPD quality. Moreover, TMT polychronicity weakens the effects of exploratory innovation on NPD speed and the effects of exploratory innovation on NPD quality. TMT polychronicity strengthens the effects of exploitive innovation on NPD speed.