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臺大管理論叢
第
27
卷第
3
期
145
of commitment to the industry and activities in conducting the core business. Therefore, to
exclude parties seeking only arbitrage opportunities, an entrant was required to hold a
majority of ownership in a mobile license and to have demonstrated activities in purchasing
telecommunication equipment or providing mobile phone service. Using these criteria, the
initial sample comprises 88 entrants to the industry, 13 of which are start-ups. Although the
sample decreased to 64 after excluding firms without performance data, the market share
represented by those 64 firms ranged from 87% to 100% between 1986 and 1998. Further
excluding firms without data on TMTs in the focal year and without data on one-year lagged
firm performance yielded 41 firms with 272 observations.
To identify TMT members, empirical studies have referred to, or defined TMTs in
several fashions: CEO, all officers reporting to the CEO, all officers on the board, first-level
officers, or titles of vice president or higher (Pitcher and Smith, 2001). In this study,
managers that meet all the following criteria are included in TMTs: (1) people who make
strategic decisions and are involved with the operations of the focal business, (2) people who
have positions in the highest level of management or the second-highest tier, and (3) people
whose job titles are vice president or higher.
5.2 Variables and Measurements
Intra-industry performance.
The
intra-industry performance
variable is measured by
the increase in cell-phone service subscribers of firm
i
from year
t
-1 to year
t
. The subscriber
figure is a performance measurement that reflects the capabilities of TMTs appropriately for
the following reasons. First, Oster (1999) suggests that for some innovations, network size
affects profitability substantially, such as in the classic example of telephone systems.
Second, the cost of switching to another service provider is low (e.g., the cost of a cell
phone, activation fee, or penalty) and maintaining customers requires reliable day-to-day
operation. The customers of firms with unreliable operations might be unable to place phone
calls or may receive poor call quality and subsequently switch to the providers offered by
competitors. Third, further increasing a firm’s subscriber base requires top managers to seek
opportunities inside and outside existing markets. Finally, a total subscriber is a more
accurate performance measurement than market share in the context of industry evolution
because a firm might be growing strongly even as the rapid growth of the entire market
reduces its market share. Hence, using a firm’s annual number of new cell-phone service
subscribers as a performance measurement enables more robust empirical testing of the
proposed hypotheses than other measurements provided. Furthermore, to control for the