The Influence of Technology-Related, Market-Related, and Standards-Related Strategic Signaling During a Standards War

To increase their likelihoods of product-market success, innovating firms use strategic signals to communicate with market participants in order to reduce participants´ perceived uncertainties associated with their innovative products. We examine, during a standards war involving a technology-based product, the influence of technology-, market-, and standards-related strategic signals on the stock price of one of the product-market´s technology leaders. A technology leader is defined as a firm that develops and promotes its proprietary product design to become industry standard. Using event study methodology, we find that a technology leader´s market- and standards-related signals have significant positive influences on this leader´s stock price; competitor technology leaders´ technology-related and standards-related signals have significant negative influences, while these competitor leaders´ market-related signals have a significant positive influence; and c ompetitor technology followers´ market- and standards-related signals lacked significant influences, while these followers´ technology-related signals possessed a weak negative influence.