Modeling Global Spill-Over in New Product Takeoff
In this article, we investigate the effects of global spill-over on a new product’s time to takeoff. This study provides two main contributions. First, we specify a model that captures international spill-over of foreign product introduction and takeoff on a focal country’s time to takeoff. Second, it is investigated how susceptibility to foreign influences and inter-country distances moderate this global spill-over. The model parameters are estimated on a novel data set containing penetration data on 8 high-tech consumer products across 55 countries worldwide, which allows us to describe global takeoff patterns. This study shows large differences in the time to takeoff across product categories, countries, and regions.Further, we find that foreign takeoffs have a stronger influence on a focal country’s takeoff than foreign introductions. The influence of these foreign takeoffs increases with the geographical closeness of the relevant countries. Tourism and demographic susceptibility of the focal country positively strengthen the foreign influence it undergoes. Our model also can quantify such foreign influences. For instance, a takeoff in the U.S. may increase the probability of takeoff in Canada by more than 30% (evaluated at 45% takeoff probability for Canada without a takeoff in the U.S.).
|Dr. B. Donkers|