Incumbents’ adaptation in institutionally induced transitions: entry timing, institutional experience and performance

Abstract This paper focuses on local rivalry and investigates the different adaptation strategies of incumbents to technological change. It explores the relevance of entry timing advantages in institutionally induced transitions by paying special attention to the role of institutional experience. Drawing data from the Merrill Lynch Global Wireless Matrix Database, we empirically test our hypotheses in the context of the European telecommunications industry and the transition from 2G to 3G. Our findings show that, (i) entry timing advantages are relevant in these contexts but are more beneficial for non-leader companies and that (ii) institutional experience accentuates the value of the wait strategy for leader companies.