COOPERATION AND ENTRY INDUCTION AS AN EXTENSION OF TECHNOLOGICAL RIVALRY

This paper investigates how the structure of cooperation in an industr y influences the dynamics of entry by start-up firms. Competition over technological dominance induces the entry of start-up firms into new subfields as incumbent firms seek to expand the consumer base using th eir technology. By cooperating, incumbent firms succeed to varying deg rees in establishing their technologies as a dominant standard by buil ding central positions in a cooperative network. Start-ups tend to ent er, however, if there is reasonable certainty that a dominant technolo gy has been established. We find strong support for the relationship b etween network centrality, as a measure of technological dominance of a standard, and the entry of start-up firms into the semiconductor ind ustry.