Competitive Dynamism in Nascent Markets: Trademarks and Superstar Firm Entry in the Metaverse
Publication Date
9-1-2023
Abstract
Does entry by a superstar firm change the competitive dynamics of nascent industries? Using USPTO trademark data and a quasi-experimental design, we explore this question by analysing the development of new products and services in the metaverse. We develop a theoretical framework of heterogeneous strategies for market entry under uncertainty, contrasting competition in digital vs. physical industries. Empirically, we show that firm size has a strong positive correlation with metaverse participation among U.S.-based trademarking firms, and that this effect is amplified for born-digital and global, physical-goods firms. However, following Facebook’s entry in 2014, we document a 10% decline in metaverse engagement; decomposing this average effect, larger and born-digital firms were minimally impacted, while globalized physical-goods firms experienced the largest declines. These results suggest that physical-goods firms are much more sensitive to superstar entry than digital-goods firms in nascent markets. Our analysis contributes to the understanding of intangible assets as key drivers of firms’ competitive advantage in the global, digital economy.
Document Type
Article
Keywords
trademarks, innovation, virtual worlds, metaverse, technological change
Disciplines
Strategic Management Policy
DOI
10.2139/ssrn.4576986
Source
SMU Cox: Strategy (Topic)
Language
English
