Three Essays On Interfirm Interdependence And Firm Performance

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Doctor of Philosophy (PhD)
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Business Administration, Management, and Operations
Management Sciences and Quantitative Methods
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This dissertation explicitly examines the structure of interdependencies that firms are subjected to within a platform-based ecosystem and its implications for firm performance. Two theoretical themes emerge from this dissertation: (1) a firm’s interdependence with other actors in the ecosystem matters both for its performance and the sustainability of its superior performance; and (2) a manager’s understanding of these interdependencies can have significant implications on firm performance and the choice of governance structures. The first essay explores how a firm’s innovation differs with respect to its interdependence with various elements of the ecosystem and examines its implications on the innovation’s commercialization success. The core set of data is based on all the apps that were launched in the Apple iPhone ecosystem from 2008 to 2013. The results suggest that firms can enhance the value of their innovation by drawing on the broader set of complementary technologies that are available in the ecosystem. But, these complementarities also subject firms to an array of bottlenecks limiting their innovation’s value creation. The second essay examines how ecosystem-level interdependencies affect the extent to which firms can sustain their value creation in a platform-based ecosystem. The analysis is based on a panel dataset of top-performing app developers in the iOS and Android ecosystems from January 2012 to January 2014. The results suggest that a firm’s ability to sustain its superior performance is facilitated by the technological interdependence faced by its innovation within an ecosystem and the experience gained within the ecosystem, but hampered by technological transitions initiated by the central firm. The third essay addresses the performance consequences of misrepresentation of interdependence structures in the alliance context using an agent-based simulation. The results suggest that the misrepresentation of interdependence structures plays an important role in determining performance consequences of various governance modes to manage the alliance relationship. Specifically, overrepresentation of interdependence structures requires fully integrated or more hierarchical governance modes, whereas underrepresentation of interdependence structures requires more decentralized governance modes. Collectively, these essays contribute to the literature on ecosystems and alliances, shedding new light on the role of structure of interdependence ins shaping firm’s performance.

Harbir Singh
Rahul Kapoor
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