The technological regime and barriers to entry

Abstract

Abstract The impact of the technological regime, defined in terms of appropriability, cumulativeness, and opportunity conditions on firms, has been examined in multiple studies. Within the analysis of technological regimes, firm entry has been of consistent interest due to its implications on competition and how firms may decide to enter an industry. However, studies show that two sources of nonlinearities warrant closer inspection, which could be achieved by looking at the entry of individual firms. The first is the interaction effects of the various dimensions of technological regimes. Their relevance is supported by both theoretical and empirical evidence, the analysis of which could be valuable for identifying the mechanisms behind the relationship between the technological regime and firm entry. Another is the role heterogeneity among entrants plays on the impact of the technological regime on firm entry, which has been found to be an important factor in many other aspects of firm behavior. This study thus aims to examine these two sources of nonlinearities, which can have significant implications for both firm strategy and policy.