Incumbent vs. New Firms’ Entry into an Innovative Niche Market: Electric Motorcycles in Italy, 2010–2021

Abstract

The recent advent of electric motorcycles represents an eco-innovation that guarantees environmental sustainability and opens up market opportunities for firms. In this paper, we analyse firms’ entry into the motorcycle industry in Italy. The role of incumbent firms in the presence of new innovative niches is ambiguous. On the one hand, incumbents may display inertial behaviours, while on the other hand, they can exploit their experience and dynamic capabilities to promptly catch opportunities and enter the new niche. Based on an original dataset, we develop an empirical investigation of the role of incumbent vs. new firms in the electric motorcycle niche. We contribute to the literature by showing that new firms have so far revealed more vivid dynamics while incumbents seem to stay at the window, thus supporting the idea of the existence of inertia among incumbent firms in this industry. However, among the incumbents that have entered the new market niche, we show that the largest and those with experience in the production of scooters with 0–50 cc engines are the most likely to enter the new niche market.