Technology and Leapfrogging in high-tech industries : Evidence from the Disc Drive Industry

Abstract

A generic curiosity prevailing in high-tech industries is that those firms owning top-edge technologies frequently fail to lead market leadership. For tackling the issue, this paper attempts to explore a fundamental mechanism of why technological leapfrogging can occur. By this sense, a technology leader is considered to be owning a currently available best technology, which is denoted as BTS (best technology superiority). Firm specific technological potentiality, in a relative sense amongst incumbents, is denoted as PTS (potential technology superiority). According to our results, leapfrogging can occur in a longer-time span, which suggests that BTS can fail to lead market leadership; PTS rather than BTS can play a more important role in technology racing game ultimately. The most salient contribution of the paper is to directly scrutinize why owing technological potentiality needs to be treated differently from owning the best technology and, accordingly, why PTS plays a more important role in technology competition in the long-run. The empirical results exactly support those theoretic predictions.