Is There Any Hope for the Follower?: Evidence from the Mobile Communications Industry in Europe

Abstract

The theory that first mover advantages can explain firm competitive advantages has a long tradition in the strategic management field. However, the empirical evidence available is inconclusive. This fact has lead researchers to examine the mechanisms that allow relating order of market entry and performance, as well as the conditions under which the pioneer should be capable of obtaining a competitive advantage. Our objective in this paper is to offer new empirical evidence on this relationship in a context, the European mobile communications industry that, a priori, seems not to be favourable to the appearance of first moveradvantages. This is a service sector in which market growth has been impressive in the last decade. According to the existing theory, these two characteristics should hinder the development of advantages based on the order of market entry. Contrarily, our results confirm that, in this industry, the pioneer enjoys a competitive advantage.