First-mover advantages in regimes of weak appropriability:: the case of financial services innovations

A well-established stream of research indicates that there are advantages to early market entry demonstrated in several industries, particularly consumer products. Such empirical regularity has not been extensively tested in regimes of weak appropriability, such as the financial services industry. In this study, we use historical methods to analyze the effects of order of market entry on market share in the financial services industry in an international setting. Analyzing three lines of financial products, we find important market share advantages to early entry in financial services innovations. The traditional models of order of market entry do not utilize all the information that is revealed by a detailed qualitative analysis of longitudinal data, and they do not distinguish nearly simultaneous entries or entries separated by long periods of time. We find that a model using elapsed time since first entry renders stronger results and better interpretations. (C) 2002 Elsevier Science Inc. All rights reserved.