We explore the role of ecosystem-level complementary technologies in explaining an innovation’s commercialization success. On the one hand, connections with complementary technologies help innovations create more value for their users. On the other hand, it can also limit the focal innovation’s value creation by exposing them to performance bottlenecks and adjustment costs. We further draw on the notion of specialization of complementary assets to ecosystems by considering complementary technologies that are specialized to a focal ecosystem and those that are available across multiple ecosystems. We highlight that while those complementary technologies that are specialized to an ecosystem facilitate greater value creation, they are more likely to subject the focal innovation to performance bottlenecks. Evidence from 244,034 apps launched by software developers for Apple’s iPhone ecosystem during 2008-2015 offers strong support for our framework.
Shiva Agarwal
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- Doctoral Student
Contact Information
- Primary Email:
shivaaga@wharton.upenn.edu - Office Phone:
(215) 898-3561
- office Address:
3032 SH-DH
3620 Locust Walk
Philadelphia, PA 19104
Research Interests: business ecosystem, innovation, platforms, technology management and strategy
Overview
Shiva Agarwal’s research is at the intersection of Technological Innovation and Strategy. Her research explores strategies pursued by firms in a business ecosystem, with an emphasis on explaining firm performance and innovation outcomes. To study these issues, she has assembled a proprietary dataset of all smartphone apps that were launched in iOS and Android ecosystems from 2008 to 2013. The key part of her dissertation is to uncover how interdependencies arising due to technical interactions among firms impacts their performance. The first chapter of her dissertation examines how the performance of the firms participating in an ecosystem is shaped by the structural and evolutionary properties of the ecosystem. She studies this by examining how the performance of app developers participating in the Apple’s iOS and Google’s Android smartphone ecosystems is impacted by the level of ecosystem complexity and uncertainty. In the second chapter, she maps the technical interaction between the complementor firms and the other elements of the ecosystem and examines its performance implications at varying levels of platform maturity. In the third chapter, she employs a computational model to explore the implications of firms having an incorrect understanding of their task interdependencies.
Research
- Shiva Agarwal and Rahul Kapoor (2023), Value Creation Trade-off in Business Ecosystems: Leveraging Complementarities while Managing Interdependencies, Organization Science, 34 (3), pp. 1216-1242. Abstract
- Rahul Kapoor and Shiva Agarwal (2017), Sustaining Superior Performance in Business Ecosystems: Evidence from Application Software Developers in the iOS and Android Smartphone Ecosystems, Organization Science, 28 (3), pp. 531-551. Abstract
We study the phenomenon of business ecosystems in which a platform firm orchestrates the functioning of the ecosystem by providing a platform and setting the rules for other complementor firms to participate in it. We develop a theoretical framework to explain how the structural and evolutionary features of the ecosystem may shape the extent to which participating complementor firms can sustain their superior performance. The structural feature, which we refer to as ecosystem complexity, is a function of the number of unique components or subsystems that interact with the complementor’s product. We incorporate the evolutionary features by considering the role of generational transitions initiated by platform firms over time as well as the role of complementors’ ecosystem-specific experience. Evidence from Apple’s iOS and Google’s Android smartphone ecosystems supports our arguments that higher ecosystem complexity helps app developers sustain their superior performance, and that this effect is stronger for more experienced firms. In contrast, platform transitions initiated by Apple and Google make it more difficult for app developers to sustain their performance superiority, and that this effect is exacerbated by the extent of ecosystem complexity. The study offers a novel account of how the performance of complementor firms in business ecosystems may be shaped by their ecosystem-level interdependencies.
- Shiva Agarwal (Work In Progress), How user entrepreneurs innovate and evolve in an smartphone ecosystem.
- Shiva Agarwal, Harbir Singh, Vikas A. Aggarwal (2015), Partnering in a haze: Interdependence mis-specification and firm performance in strategic alliances, . Abstract
We examine the firm performance implications of managers having an incorrect representation of their inter-firm task interdependencies in the context of alliance relationships. Although uncertainty regarding inter-firm interdependence is common in practice when structuring alliances, prior literature provides limited evidence on the firm performance implications of such “misspecifications.” We employ a computational model to examine firm performance in an alliance context where firms have either under- or over-specified views of their inter-firm interdependencies. We find that firm performance declines with greater misspecification, with variation in this effect across alliance governance modes and across levels of actual interdependence. In addition, we find that interdependence misspecifications have differing effects on exploration and coordination, leading to tradeoffs between performance and these other non-performance alliance objectives.
Teaching
Course Instruction (Wharton):
Introduction to Management (Undergraduate) – 2013, 2014
Required course for undergraduate business majors that covers topics ranging from corporate strategy to
organizational behavior
Teaching Assistantship (Wharton):
Corporate Strategy (Executive MBA)
· Teaching Assistant for Harbir Singh – 2012, 2013, 2014, 2015
Competitive Strategy (Undergraduate)
· Teaching Assistant for Olivier Chatain – 2013
Core Strategy (MBA)
· Teaching Assistant for Nicolaj Siggelkow – 2012