Firms accumulate knowledge through product development activities such as efficient product design, various experimental data, and know-how of project management. By
exploiting this knowledge, firms are able to improve product quality, reduce cost, and shorten the development lead time. The more firms accumulate knowledge, the more they are able to gain competitiveness by
exploiting their knowledge. However, because of efficiency gained by
exploitation, firms can sometimes excessively
exploit their knowledge, thus making their products too similar to and less attractive than earlier products and, as a result, lose competitiveness. In this paper, we employ a time series analysis to show that excess
exploitation of know-how reduced product creativity in the Japanese video game industry.
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