Abstract
Integrating insights from the product life cycle literature with research on the influence of regulations on innovation, we explore the uncharacteristic innovative behavior that emerges in a mature industry in the presence of administered prices. We suggest that the resulting loss in price flexibility reduces the relative importance of process innovations vis-à-vis product innovations as a competitive strategy. Using data on the US wheelchair industry, we test and find some support for our argument. Our results also show that this shift towards product innovations penalizes otherwise highly innovative entrants more than incumbents. This is because administered prices are normally coupled with product specification guidelines that limit the opportunities to make radical product innovations, in which entrants have a competitive edge.
| Original language | English |
|---|---|
| Title of host publication | Academy of Management Proceedings |
| Publisher | Academy of Management |
| Pages | 19273 |
| Number of pages | 1 |
| Volume | 2020 |
| Edition | 1 |
| Publication status | Published - 29 Jul 2020 |
| Externally published | Yes |