Drivers for companies' entry into standard-setting organizations

Globalization has been a main driver for firms' entry into standard-setting organizations (SSOs). These global multifirm settings have caught attention due to tensions arising from simultaneous collaboration and competition among firms as well as due to the increasing geographical complexity of the standardization process. SSOs present one form of a multifirm environment, where companies proactively and voluntarily collaborate to develop a new standard. Although a growing body of literature has tried to understand firms' underlying rationales for engaging in SSOs, we know little about firm-level characteristics influencing the propensity to enter a standard-setting organization. For this purpose, data of the Community Innovation Survey 2011 for Germany are merged with data of companies' participation at technical committees of the German Institute for Standardization (DIN) between 2010 and 2013. Using these unique data, we can observe the moment when firms enter a technical committee of a formal SSO and, hence, tackle the problem of simultaneity. Our results show that the likelihood to enter a technical committee of an SSO increases for firms that introduce new products or services into the market, while absorptive capacity does not have a significant positive influence. Finally, the protection of innovations by patents further enhances the likelihood to enter a technical committee of an SSO.