Graduation Year

2016

Date of Submission

12-2016

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Darren Filson

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© 2016 Taylor J. Lemmon

Abstract

In recent years the concept of disruptive innovation has become central to business and innovation. A disruptive innovation can be defined as a product, service, technology, or business model that enters the market as either a low-end entrant, while simultaneously bringing some new attribute to the market; or as a new market disruptor that creates a distinct foothold in a previously undiscovered market. Much of the previous research into disruptive innovation has been through case study frameworks, and by selection of specific firms that fit the model. The question is, does the model have merits beyond expounding on past successes and failures across industries, and can it forecast successful disruptors? In this paper I analyze all Technology Sector firms that have entered the public markets between Jan 2002 - Dec 2013. I attempt to determine if a disruptive strategy leads to high growth performance for firms over a twelve quarter period. I also seek to find out if disruptive firms are market leading companies, in terms of having a high market capitalization. I find that a firm being a disruptor has a significant correlation to the growth factor across firms. I also find significance between a firm being a disruptor and holding a max market cap position above the 90th percentile in the sample. In a similar regression for the 80th percentile of firms, I do not find any significant correlation.

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