Events

Dr. Qingqing Chen
Ph.D. Candidate in Applied Economics
The Wharton School
University of Pennsylvania

This paper examines the role of third-party companies in the standard-setting process when the cooperation between two groups of key players is exogenously disrupted. By jointly considering technology interdependence and cooperative interactions between players in an innovation ecosystem, the paper builds a framework to understand the third party’s technological and sociological salience in the face of disruptions. The paper argues that after a disruption, a third-party player will become more influential in the standard setting process if it (1) has the technical potential to replace either party in the disrupted relationship (the substitution effect); or (2) serves as an information broker, connecting the two groups of players (the brokerage effect). Social familiarity magnifies the substitution effect, and the technology proximity between the disconnected two parties negatively moderates the brokerage effect. The theory hypotheses are supported by evidence collected in 3GPP, an international telecommunication standard-setting organization, during the recent US sanctions on Huawei. By tracking 67 active third-party companies’ standard proposals in 535 3GPP meetings, I find supportive evidence for the substitution and the brokerage effects.