Analysis of Firms’ Incentives to Control the Standard Development Process

Abstract

We study how competitive, technological and network incentives influence firms participation behaviour within the standard development process. We focus on firms representing architecture-level and implementer-level positions in the wireless telecommunications industry value chain. We also investigate how the value of a firm’s proprietary technology influences its participation behaviour. We find evidence that firms representing architecture and implementer-level positions are more likely to promote technical features. Furthermore, we find that firms representing the architecture-level and implementer-level positions with more valuable proprietary technology are more likely to promote technical features than their intra-segmental competitors with less valuable proprietary technology. These findings have important implications for the emerging stream of research on standards development organizations.

Keywords: standard development organizations, wireless telecommunications, proprietary technology

JEL Classification: L14, L24, D23