Juan Pablo Maicas

Switching Costs, Network Effects, and Competition in the European Mobile Telecommunications Industry

This paper empirically analyzes the joint effect of switching costs and network effects in determining the level of competition in the European mobile communications industry. Theoretical reasoning argues that switching costs and network effects may confer some market power that firms can strategically exploit to reduce competition and thus increase profits. Theoretical predictions are completely confirmed by the empirical evidence and important asymmetries between the market structures in the different European countries can be observed. These asymmetries are clearly related to the levels of switching costs and network effects---the greater their importance, the lower the rivalry in the market. This suggests that the recent efforts of policymakers to reduce the negative consequences of switching costs and network effects have not been successful enough and these efforts must be strengthened, at least in several countries.

How different formal institutions affect opportunity and necessity entrepreneurship

The objective of this research is to deepen in the role played by formal institutions on the different types of entrepreneurship (opportunity and necessity) as well as in its relative importance. The institutions we analyze are property rights, business freedom, fiscal freedom, labor freedom, financial capital and educational capital. Our results show that, in general, opportunity entrepreneurship benefits from an improvement of these institutions, while necessity entrepreneurship is damaged. This will positively influence the relative presence of opportunity entrepreneurship that is usually considered to be of greater quality and is more clearly related to economic development in a country.

A Strategic Approach to Network Value in Network Industries

This article extends previous research on network industries by analyzing the role that firm strategy plays in markets where network effects are important. The authors postulate that firms can benefit from the existence of network effects through their strategic choices. The main premise of this article is that companies, by influencing expectations, coordination, and compatibility, can leverage network effects and network value. The authors empirically test their hypotheses in the mobile telecommunications industry, a paradigmatic example of a network industry. This study not only seeks to understand the impact of firm strategy on network value but also analyzes the impact of the latter on firm performance.

The institution-based view of strategy: How to measure it

The institution-based view of strategy has emerged as a leading perspective in Strategic Management. It incorporates the institutional dimension when offering relevant answers to the fundamental questions of strategy. One of the challenges of this perspective is to develop stronger measures of institutions (Peng et al., 2009). This paper seeks to contribute in this direction by offering a detailed analysis of the main measures of institutions that previous works in Strategic Management have used. Our aim is to offer a guide that will help researchers to decide how they should incorporate the institutional dimension into their empirical work.

Análisis de la intensidad de los costes de cambio en la industria de la telefonía móvil

Resumen El presente trabajo pretende profundizar en los determinantes de la intensidad de uno de los elementos que mayor relevancia esta adquiriendo en el estudio de los mercados tecnologicos: los costes de cambio. Para acometer esta tarea abordamos el analisis de dos potenciales fuentes de dicha intensidad: (i) las relacionadas con las propias caracteristicas de las empresas (tamano y tiempo de permanencia en el mercado) y (ii) las que se derivan de las condiciones estructurales del mercado (ciclo de vida de la industria, nivel de competencia y regulacion). Centraremos nuestro estudio en la industria de la telefonia movil que, tanto por sus caracteristicas estructurales como por la evolucion que ha experimentado en los ultimos anos, adquiere una relevancia mas que notable. Los principales resultados del trabajo apuntan a que, no solo influyen en la intensidad de los costes de cambio variables bajo el control de las operadoras, sino que tambien tienen una incidencia significativa el contexto (entorno) en el que estas operan. Este hecho contribuye a explicar, si quiera parcialmente, las diferencias que se observan en los niveles de competencia de los mercados analizados.

Network Effects in the Mobile Communications Industry: An Overview

Information technology (IT) markets, in general, and mobile telecommunications, in particular, represent a large and growing portion of today’s economy. They are one of the main sources of economic growth in modern economies (Greenspan 2000) and provide the basis for the development of a knowledge-centric world. The rapid development of these markets and the central role that they play in the economy have attracted the attention of a large number of researchers who have shifted their emphasis from traditional markets to the so-called New Economy. When dealing with these markets, however, it is important to understand that they are governed by a unique set of characteristics that may render wellestablished principles and managerial practices invalid (Shapiro and Varian 1998). One of the most significant distinctive features of these markets is the central role played by the network of users. In IT markets, customers derive utility not only from the product/service itself, but also from the networks surrounding these products (Frels, Shervani, and Srivastava 2003). This is because the installed base of users offers benefits to existing and potential customers in the form of reduced uncertainty, compatibility, the transfer of technical and non-technical information between members of the network and the increased availability and quality of complements, among others (Farrell and Klemperer 2007). This feature explains why IT markets are frequently referred to as network markets (Shankar and Bayus, 2003; Tanriverdi and Lee, 2008). Mobile communications, video games and software are just three examples of businesses where network effects drive market competition and consumer behavior. The network of users becomes a central strategic asset for assessing the firm’s current and future competitive position (Shankar and Bayus 2003; McIntyre and Subramaniam 2009) and, as a result, the understanding of network effects has become a top priority for researchers and practitioners alike. The previous discussion can help explain why network effects have emerged as a trendy topic in recent years in economics and management literatures. This research stream focuses on understanding how network effects alter the way in which firms compete. This increasing interest is due to the evidence that network industries seem to challenge much of

Customer‐Base Management in Network Industries: The Moderating Role of Network Size and Market Growth

The study of network industries has emerged as an important research theme. In these markets, the customer base is a critical strategic asset for assessing the firms current and future competitive position. To manage the customer base optimally in these industries, it is crucial to understand the key drivers of customer acquisition and retention. In this study, we integrate strategic and customer management research and provide a framework to understand the direct role of price and the moderating influences of two central characteristics of network markets, namely, network size and market growth, on a firms ability to acquire and retain customers. The proposed framework is empirically tested in the European mobile communications industry using a longitudinal panel that contains information (quarterly data during 1998 to 2008) for 65 companies in 19 European markets. Our findings offer mixed support for the proposed framework as they reveal that, while network size and market growth do moderate the effect of price on customer acquisition, they only exert a direct influence on customer retention.

¿Cómo afecta la distancia a la expansión internacional de las empresas? Evidencia en la industria de las telecomunicaciones móviles

The aim of this study is to analyse how the distance between countries determines host country selection. To explain foreign market entry we use two dimensions of the distance between countries: (1) geographic distance and (2) historical ties between the home and the host countries. We carry out descriptive, empirical and case study analyses in the mobile telecommunications industry to study how these two dimensions of distance determine the entrance of firms in foreign countries. Our work shows that geographic distance negatively affects the entrance of firms in host countries while historical ties between countries encourage firms to enter the host country. Moreover, historical ties positively moderate the relationship between geographic distance and market entry.

Institutional Dynamism in Entrepreneurial Ecosystems

Entrepreneurs are involved in entrepreneurial ecosystems. These ecosystems incorporate institutions that interact with entrepreneurs in different ways depending on the stage of the business life cycle the entrepreneur is in. By incorporating institutional theory and business life cycle theory to the analysis of ecosystems, we propose which kind of institution will answer the entrepreneurial question addressing who is there to help their venture depending on the stage of the life cycle it is in. This paper seeks to provide guidance on the institutional support available to increase a venture’s chance of success and improve the efficiency of the resource base of ecosystems.

Entrepreneurs and innovation: The contingent role of institutional factors:

Entrepreneurs play a key role in introducing innovations into the market. However, the extant literature has found that the degree of innovation within new ventures varies considerably and that these differences can be related to the individual factors of entrepreneurs. In this article, we go one step further and suggest that the influence of individual factors on innovation is contingent on the institutional context. We use a sample of more than 140,000 entrepreneurs from 101 countries that have participated in the Global Entrepreneurship Monitor (GEM) project between 2005 and 2015. Our results show that individual characteristics of the entrepreneur, such as risk tolerance, entrepreneurial alertness, education and previous entrepreneurial experience, influence innovation in new ventures but that their effect is reinforced by an institutional context with high economic freedom.