Ecosystem Complexity and Firm Performance: How do Focal Firms Technology and Actor Ecosystem Complexity Affect Value Creation?

We investigate focal firms’ heterogenous value creation in the context of contingencies that influence the complexity of their ecosystems. We categorize this complexity into technology and actors, which are the key architectural components that determine an ecosystem’s functionality. We develop a framework relating the complexity of technology and actor ecosystems to focal firms’ value creation and construct measures to quantify this complexity. Using licensing and ecosystem activity data from 83 chipless firms from 1985 to 2005, we find that increased complexity in technology and actor ecosystems enables focal firms to generate more value from their ecosystems. In addition, we find that the joint effects of technology and actor complexity augment the value that focal licensors generate from licensing within ecosystems.