Tech Giants and New Entry Threats

Abstract

Tech giants like Amazon, Apple, Facebook, Google, and Microsoft have drawn antitrust concerns due to their perceived power, potentially stifling new startups, especially through the so-called kill zone within their product domains. This study demonstrates that tech-giant entrants face a significantly lower likelihood of obtaining follow-on financing and achieving long-term survival in recent years. However, such phenomena are transitory and concentrated among tech-giant entrants lacking patents and operating within segments characterized by high network effects. There is no evidence that the M&As conducted by tech giants deter entries. Furthermore, tech giants experience more entries compared to the average tech incumbent.