Complementor innovation is an essential form of value co-creation in open platform ecosystems. However, the increasing technology fragmentation, i.e., users in the ecosystem adopting different versions of the platform technologies, has significantly hindered complementor innovation. Platform's investment to fight fragmentation may have unclear effects on complementor innovation since reducing platform fragmentation is a complex coordination problem involving several parties in the ecosystem. Focusing on the recent efforts by Google to address Android fragmentation, and based on both cross-platform and within platform analyses, we find that app developers do respond to the platform's commitment in fighting fragmentation and significantly increase their innovation efforts in updating apps shortly after the platform's investment, despite that the fragmentation reduction takes a longer time to materialize in the platform infrastructure. We then test for the complementor’s forward-looking behavior and find strong evidence. Such forward-looking behavior is likely driven by developers’ anticipation of lowered innovation cost and higher perceived platform value in future. Our research highlights the role of platform commitment to improve platform infrastructure in complementor innovation and provides implications for platform investment and intervention.

Grace Gu and Zhuoxin Li. 2022. "Technology Fragmentation, Platform Investment, and Complementary Innovation." Working Paper. Available at SSRN: http://ssrn.com/abstract=4061870