Innovation, Appropriation and Entrepreneurial Strategy
The author analyses the strategy of an entrepreneur seeking to earn a return on a new discovery when faced by an incumbent firm and pool of potential entrants. Findings indicate that it is the magnitude of the discovery and its susceptibility to appropriation, rather than entry costs, that are the main determinants of whether entry will occur.
Link
http://www.socsci.soton.ac.uk/Economics/Research/Discussion_Papers/2004/0403.pdf