Does pre-entry licensing undermine the performance of subsequent independent activities? Evidence from the global aerospace industry, 1944-2000

Pierre Dussauge 1 Louis Mulotte Will Mitchell
1 GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC
Abstract : We study how firms' use of in-licensing for their initial entry to a business domain can detract from the performance of their subsequent autonomous endeavors in the domain. We argue that in-licensing produces high levels of causal ambiguity about factors that drive the performance achieved with the licensed product. In turn, the experience that firms gather through pre-entry licensing is likely to generate superstitious learning and overconfidence that undermine the performance of licensees' subsequent independent operations. The biases will be particularly strong in the face of contextual dissimilarity. We find consistent evidence in a study of firms that entered the global aircraft industry between 1944 and 2000. The research helps advance the understanding of the benefits and costs of markets for technology.
Keywords : causal ambiguity experiential learning licensing new business entry overconfidence
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Journal articles
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https://hal-hec.archives-ouvertes.fr/hal-00781507
Contributor : Antoine Haldemann <>
Submitted on : Sunday, January 27, 2013 - 2:08:02 PM
Last modification on : Thursday, January 11, 2018 - 6:19:32 AM

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Pierre Dussauge, Louis Mulotte, Will Mitchell. Does pre-entry licensing undermine the performance of subsequent independent activities? Evidence from the global aerospace industry, 1944-2000. Strategic Management Journal, Wiley, 2013, 34 (3), pp.358-372. ⟨10.1002/smj.2003⟩. ⟨hal-00781507⟩

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