Date of Award

Spring 2021

Document Type

Open Access Dissertation


Moore School of Business

First Advisor

Sali Li


This dissertation builds on the logic of opportunity and the institutional perspective to explore how firms iterate to innovate in the uneven landscape of the global digital marketplace. In such nascent industries, innovative firms could not rely on differential positioning or valuable resources to sustain advantage but must take actions of iterative search to capture fleeting opportunities. Specifically, I focus on the role of design iteration, through which firms engage in trial-and-error learning and create situation-specific knowledge. While this logic of opportunity has received a significant upsurge of interest from strategy and entrepreneurship scholars, it largely assumes a homogeneous institutional environment in which nascent industries are embedded. The assumption mostly holds because new industries emerge in advanced economies with similar institutions. However, as innovation becomes increasingly democratized on a global scale, firms operating in heterogeneous institutional contexts can simultaneously partake in nascent industries. It is therefore important for us to understand how firms should strategize design iteration to pursue distinctive flows of opportunities in/across various institutional contexts. Specifically, I develop three essays around this important inquiry in the context of the global mobile application industry. First, while extant research advises firms to continually iterate designs, I unveil the hidden dark side of design iteration using a difference-in-differences design based on mobile game apps that multihome on two platforms. In my second essay, I investigate how firms navigate varying levels of institutional uncertainty by strategizing their design iteration. I find that frequent design iterations enable firms to overcome high institutional uncertainty and capture opportunities to innovate new products. This study extends the logic of opportunity and a dynamic view of institutions. Third, I further explore how digital startups strategize iteration with rhythms to compete simultaneously across different institutional contexts. I find that while digital startups tend to iterate product designs with rhythms, they strategize such iteration rhythms differently to align with their international diversification conditions. My dissertation takes an initial but important step toward infusing opportunity logic with the institutional perspective and develops a rigorous, quantifiable, and generalizable understanding of how firms iterate to innovate in the global digital marketplace.