Print Email Facebook Twitter Capability-based governance patterns over the product life-cycle: an agent-based model Title Capability-based governance patterns over the product life-cycle: an agent-based model Author Vermeulen, B. (Eindhoven University of Technology; University of Hohenheim) Pyka, A. (University of Hohenheim) la Poutré, J.A. (TU Delft Intelligent Electrical Power Grids; Centrum Wiskunde & Informatica (CWI)) de Kok, A.G. (Eindhoven University of Technology) Date 2016-11-28 Abstract In recent literature, there is disagreement over the temporal pattern of vertical governance of firms over the product life-cycle. We use a novel neo-Schumpeterian agent-based simulation model to investigate emerging patterns of vertical governance for different levels of imitability and substitutability of capabilities. We find that, in the mature phase of the product life-cycle, firms generally prefer vertical specialization. However, in the early phase, imitability and substitutability, in interplay, determine the governance form preferred. High imitability frustrates appropriation and thereby discourages integration for synergistic advantages. However, firms need not vertically specialize: under low substitutability, incompatibilities reduce the advantages of specialization. When both substitutability and imitability are low, firms can appropriate the value of their inventions and there is no combinatorial advantage of specialization, so firms predominantly integrate. If substitutability is high and imitability is low, the combinatorial advantage of specialization balances with the synergistic advantage of integration. Subject Vertical governanceCapabilitiesImitabilitySubstitutabilityProduct life-cycleAgent-based model To reference this document use: http://resolver.tudelft.nl/uuid:35b72902-a50d-42b0-86eb-611d1917aeaa DOI https://doi.org/10.1007/s11403-016-0184-x ISSN 1860-711X Source Journal of Economic Interaction and Coordination, 1-39 Part of collection Institutional Repository Document type journal article Rights © 2016 B. Vermeulen, A. Pyka, J.A. la Poutré, A.G. de Kok Files PDF art_3A10.1007_2Fs11403_01 ... 0184_x.pdf 1.99 MB Close viewer /islandora/object/uuid:35b72902-a50d-42b0-86eb-611d1917aeaa/datastream/OBJ/view