Inaugural Market Entry and Information Asymmetry: An Integrated Look at De Novo Entrants
This paper examines the role of prior industry knowledge and market entry strategies on the survival hazards of de novo entrants. We rely on a census of de novo ventures in the intra-European scheduled passenger airline industry. Contrary to predictions in the existing literature, we find that targeting new markets does not confer statistically significant survivability to new entrants, unless they have prior industry knowledge. Also contrary to theoretical predictions, entrants who compete head-on with incumbents in existing markets show higher survivability because of prior industry knowledge, although the impact is smaller than those targeting new markets. Overall, there is weak evidence that survivability for new firms improve over time.
prior knowledge, new entrants, market entry
Strategic Management Policy
Strategy and Organisation
Academy of Management Annual Meeting, Philadelphia, 3-8 August 2007
City or Country
FAN, Terence Ping Ching and PHAN, Phillip H..
Inaugural Market Entry and Information Asymmetry: An Integrated Look at De Novo Entrants. (2007). Academy of Management Annual Meeting, Philadelphia, 3-8 August 2007. 330. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/1828