An empirical assessment of the impact of switching costs and first mover advantages on firm performance

Resumen

The purpose of this paper is to test the effectiveness of switching costs as an isolating mechanism in the context of the first mover advantage theory. Whereas both the literatures on switching costs and pioneering propose this as a mechanism through which firms could obtain sustainable competitive advantage, other authors offer a rationale to think that this is not the case. We test our hypotheses in the context of the European mobile telecommunications industry. This is a sector that has been characterized by high rates of growth in the number of subscribers, what could reduce the effectiveness of switching costs from being effective as an isolating mechanism. Our results show that switching costs is an important weapon through which first mover advantage materializes