¹Business Department, Universidad Carlos III de Madrid, Madrid, Getafe, Spain

Correspondence: Marco S Giarratana, Departamento de Economia de la Empresa, Universidad Carlos III de Madrid, Despacho 6.0.35, Calle Madrid 126, Madrid, Getafe 28903, Spain. Tel: +34 91 6249613; Fax: +34 91 6249607; E-mail: marco.giarratana@uc3m.es

Abstract

This article analyses entry order decisions of incumbent firms diversifying from other industries (de alio entrants) in new markets. We study this issue in the Security Software Industry, a high turbulent industry in which de alio firms were first technological movers but start-ups dominate the downstream product market. With a generalized Tobit estimation of observed entry order decisions, we find that pre-entry firm capabilities that should represent strategic options do not significantly explain firm entry order. The article argues that inertial decisions more than rational assessments drive de alio entry order in Security Software.