Internally Versus Externally Developed Technology and Market Acceptance of Innovations: The Complementary Role of Branding

摘要

Empirical studies that relate internally versus externally developed technology to market acceptance of innovation during emergent stages provide contradictory findings. We contend that these conflicting findings might be the result of a theoretical mis specification in existing models that fail to consider the effect of synergy between a firm's technology development choice and its branding choice. We use the concepts of value creation and value appropriation to develop our hypotheses relating different combinations of technology development and branding choices to market acceptance. With data on the early history of Internet banking in the United States, we show that internally developed technology leads to greater market acceptance than externally developed technology, but this effect changes with the choice of a brand extension versus a new brand. Specifically, firms that combine internally developed technology with a new brand achieve greater market acceptance for their innovation during emergent stages.