Week 44: Shane 2001 Flashcards
Technological Opportunities and New Firm creation
What is the main idea of Shane (2001) paper?
The paper explores how technological opportunities (importance, radicalness, patent scope) influence the creation of new firms.
What are the three dimensions of technological opportunities?
Importance, Radicalness, and Patent Scope.
What is the “importance “dimension in technological opportunities?
The economic value or potential payoff of an invention.
What does “radicalness “mean in technological opportunities?
The degree of novelty and how much an invention differs from existing technologies.
What does patent scope refer to in Shane (2001)?
The breadth of intellectual property protection an invention has, affecting how easily it can be defended against imitation.
Why do important inventions influence new firm creation?
They offer higher economic returns, motivating entrepreneurs to take risks and start a business.
Why are radical inventions more likely to be commercialized by new firms rather than established ones?
Radical inventions often require new skills that established firms lack and may undermine their existing assets.
How does patent scope influence the likelihood of new firm creation?
Broader patent scope prevents competitors from imitating, giving new firms time to build a competitive advantage.
What is Hypothesis 1 in Shane (2001) about importance and firm creation?
The more important the invention, the higher the probability it will be commercialized through a new firm.
What is Hypothesis 2 in Shane (2001) about radicalness and firm creation?
The more radical the invention, the higher the probability it will be commercialized through a new firm.
What is Hypothesis 3 in Shane (2001) about patent scope and firm creation?
The broader the patent scope, the higher the probability that the invention will be commercialized through a new firm.
What is creative destruction, according to Schumpeter?
The process by which new technology firms displace incumbent firms by introducing innovations, driving economic progress.
