Firms' Heterogeneity and Dynamics of Entry in a New Sector: Analysis of the Multimedia Service Provision Sector

Abstract

This paper analyses a telecommunications firm’s choice to enter the multimedia service provision business, and empirically specifies a strategy-capability model that relates the potential entrant’s choice to both its external environment and its evolving collection of internal capabilities. The MOSAICO database has provided the econometric model with a sample composed of the initiatives undertaken in the new business by the world’s largest common carriers in the 1990-‘96 period. The empirical results support the view that, in the current phase of the new business, cooperation is an effective learning device; further, a bandwagon effect is partly accepted. Lastly, a competence-enhancing nature of the multimedia service provision with respect to technological knowledge can be rejected.

Raffaello Seri

Professor of Econometrics

My research interests include statistics, numerical analysis, operations research, psychology, economics and management.