Cited by 105Digital Platforms and EconomicsInnovation and Knowledge ManagementService and Product Innovation

Value Creation Tradeoff in Business Ecosystems: Leveraging Complementarities While Managing Interdependencies

Agarwal, Shiva, Kapoor, Rahul·2023·Organization Science

Abstract

Complementary assets play an important role in shaping an innovation’s commercialization success. In this paper, we broaden the locus of complementarities to examine the role of complementary technologies residing in the business ecosystems that are becoming an important source of value creation for innovating firms. We argue that, on one hand, complementary technologies help innovations create more value for their users. On the other hand, they can also limit the focal innovation’s value creation by exposing them to performance bottlenecks as the underlying technological architecture of the ecosystem evolves. We further extend the notion of specialization of complementary assets to ecosystems by considering complementary technologies that are specialized to a focal ecosystem and those that are available across multiple ecosystems. We highlight that, although the complementary technologies that are specialized to an ecosystem facilitate greater value creation, they are more likely to subject the focal innovation to performance bottlenecks. Evidence from 244,034 apps launched by software developers for Apple’s iPhone ecosystem during 2008–2015 offers strong support for our framework. In summary, the study sheds light on the value creation tradeoff for firms innovating in business ecosystems—the opportunities associated with leveraging complementarities and the challenges associated with managing technological interdependencies. Funding: S. Agarwal was funded by the McCombs Sch…

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Crossref · 10.1287/orsc.2022.1615

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  • Prior literature has largely overlooked the timing of multihoming as a key strategic dimension.

    “this focus has largely overlooked a key strategic dimension of complementors' multihoming decisions: when to multihome.”

    From Smart Timing for Smart Products? Complementor Multihoming in Nascent Platform Markets (2026) · cites this paper as Agarwal and Kapoor 2023

  • Existing platform literature has primarily focused on the determinants and the consequences of complementors' decision to multihome.

    “Existing platform literature has primarily focused on the determinants and the consequences of complementors' decision to multihome”

    From Smart Timing for Smart Products? Complementor Multihoming in Nascent Platform Markets (2026) · cites this paper as Agarwal and Kapoor 2023

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Authors
Agarwal, S., & Kapoor, R.
Affiliations
  • The University of Texas at Austin (US)
  • University of Pennsylvania (US)
Venue
Organization Science
Published
2023-05
Volume
34
Issue
3
Pages
1216-1242
ISSN
  • 1047-7039 (ISSN-L)
  • 1526-5455
OpenAlex
W4303982511
Cited by
105
References
0
Citations by year
2026: 39 · 2025: 36 · 2024: 22 · 2023: 8
FWCI
12.32
Type
journal article
Language
en
Open access
closed
Locations
Organization Science (publishedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Digital Platforms and Economics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
  • Social Sciences › Business, Management and Accounting › Marketing › Service and Product Innovation
Keywords
business ecosystems, complementary technologies, technological interdependencies, performance bottlenecks, innovation commercialization, software developers, technical architecture

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