All previous empirical work assessing the effects of pioneering on firm performance treats pioneering as an exogenous variable. The authors develop a theoretical model of the entry decision that suggests treatment of pioneering as an endogenous variable. They test the model by reestimating a recent empirical pioneering model. Using Hausman's specification test, they find statistically significant bias in the exogenous pioneering model. In assessing the effect of pioneering on market share, they find substantive differences between the biased and inconsistent exogenous pioneering estimates and the consistent endogenous estimates in terms of both statistical and practical significance.
Get full access to this article
View all access options for this article.
References
1.
AndersonCarl R., and PaineFrank T. (1978), “PIMS: A Reexamination,”Academy of Management Review, 3(July), 602–12.
2.
BiggadikeRalph E. (1976), Entry Strategy and Performance.Cambridge, MA: Harvard University Press.
3.
BondRonald S., and LeanDavid F. (1977), Sales, Promotion and Product Differentiation in Two Prescription Drug Markets.Washington, DC: Federal Trade Commission.
4.
DuncanGregory M., and LeighDuane E. (1985), “The Endogeneity of Union Status: An Empirical Test,”Journal of Labor Economics, 3, 385–402.
5.
FershtmanChaim, and MahajanVijay, and MullerEitan, “Market Share Pioneering Advantage: A Theoretical Approach,”Management Science (forthcoming).
6.
HausmanJerry A. (1978), “Specification Tests in Econometrics,”Econometrica, 46(November), 1251–72.
7.
LeeLung-Fei (1978), “Unionism and Wage Rates: A Simultaneous Equations Model With Qualitative and Limited Dependent Variables,”International Economic Review, 19, 415–33.
8.
LiebermanMarvin B., and MontgomeryDavid B. (1988), “First-Mover Advantages,”Strategic Management Journal, 9(Special Issue), 41–58.
9.
MooreMichael J. (1989), “Skill, Choice, and Chance in the Entry Timing Decision,” Fuqua School of Business Working Paper.
10.
RobinsonWilliam T. (1988), “Sources of Market Pioneer Advantages: The Case of Industrial Goods Industries,”Journal of Marketing Research, 25(February), 87–94.
11.
RobinsonWilliam T., and FornellClaes (1985), “Sources of Market Pioneer Advantages in Consumer Goods Industries,”Journal of Marketing Research, 22(August), 305–17.
12.
SchnaarsSteven P. (1986), “When Entering Growth Markets, Are Pioneers Better Than Poachers?”Business Horizons, 29(March/April), 27–36.
13.
UrbanGlen L., and CarterTheresa, GaskinSteven, and MuchaZofia (1986), “Market Share Rewards to Pioneering Brands: An Empirical Analysis and Strategic Implications,”Management Science, 32(June), 645–59.
14.
WhittenIra T. (1979), Brand Performance in the Cigarette Industry and the Advantage of Early Entry, 1913–73.Washington, DC: Federal Trade Commission.
