Rights statement: This is the author’s version of a work that was accepted for publication in Research Policy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Research Policy, 50, 2, 2020 DOI: 10.1016/j.respol.2020.104157
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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - The Role of Technology Standards in Product Innovation
T2 - Theory and Evidence from UK Manufacturing Firms Research Policy
AU - Foucart, Renaud
AU - Li, Cher
N1 - This is the author’s version of a work that was accepted for publication in Research Policy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Research Policy, 50, 2, 2020 DOI: 10.1016/j.respol.2020.104157
PY - 2021/3/1
Y1 - 2021/3/1
N2 - This paper studies the role of technology standards in firms’ product innovation in terms of both incremental innovation (within a technology life cycle) and radical innovation (beyond the present technology cycle). We first develop a theoretical model which predicts that technology standards can be used by firms as an “insurance” hedging against the risky process of developing new products. This insurance mechanism fosters incremental innovation and product growth especially for those further away from the technological frontier. Using data from a weighted panel of UK manufacturing firms over seven years, we find that the use of technology standards over past years significantly enables a firm’s incremental innovation while also reducing its incentive to deliver radical innovation. Additionally, we show that this relationship is contingent on a firm’s R&D intensity in line with predictions of our theoretical model.
AB - This paper studies the role of technology standards in firms’ product innovation in terms of both incremental innovation (within a technology life cycle) and radical innovation (beyond the present technology cycle). We first develop a theoretical model which predicts that technology standards can be used by firms as an “insurance” hedging against the risky process of developing new products. This insurance mechanism fosters incremental innovation and product growth especially for those further away from the technological frontier. Using data from a weighted panel of UK manufacturing firms over seven years, we find that the use of technology standards over past years significantly enables a firm’s incremental innovation while also reducing its incentive to deliver radical innovation. Additionally, we show that this relationship is contingent on a firm’s R&D intensity in line with predictions of our theoretical model.
KW - Technology standards
KW - Incremental innovation
KW - Radical innovation
KW - R&D intensity
U2 - 10.1016/j.respol.2020.104157
DO - 10.1016/j.respol.2020.104157
M3 - Journal article
VL - 50
JO - Research Policy
JF - Research Policy
SN - 0048-7333
IS - 2
M1 - 104157
ER -