Fama and French (2004) document a dramatic decline in the survival rates of newly listed firms over the past several decades, both in absolute terms and relative to seasoned firms. Therefore, IPOs, which are considered the drivers of innovation in modern economies, may suffer from questionable credibility if they have low survival rates after their first great success. I focus on the central drivers – invention capability and commercialization capability – that may prevent such failures. These firms’ ability to acquire and integrate new knowledge into inventions and their ability to convert inventions to innovations could be central to ensuring survival.

This leads to the following research question: Is the development of post-invention and post-commercialization capabilities deliberate (through strategic investments in specialized assets) or inadvertent (e.g., due to path dependency or causal ambiguity)? Furthermore, if the development of capabilities is path dependent, do strategic investments play an important role in further leveraging path dependence?