Paths to New Recombination, Winning Experiences With or Without Failure: A Behavioral Perspective

Abstract

We examine when and how firms explore to generate to new recombination. Drawing on behavioral perspective literature, we conceptualize two distinct paths of firm performance feedback: persistent winning experiences and winning experiences with failure. We argue that firms whose paths accumulate winning experiences are more likely to pursue new recombination than firms whose paths accumulate failures. We argue that persistent winning experiences will bring higher motivation for a firm to generate an new recombination than winning experiences with failures. We find support for our hypotheses using data from the global smartphone industry from 2007 to 2018. The findings imply that the differences in paths of firm that have accumulated experiences of winning and failure explain the heterogeneity among firms in generating new recombination.