"Category Recombination and Entrepreneurial Inertia in the Market for Electronic Music, 1978-2011"

Our paper focuses on categories as the basic components of a map structuring the market, and explores how alteration in categories, by influencing the potential entrants’ interpretation of the market environment, is conducive to a reduced number of entrepreneurial events. Specifically, we argue that such entrepreneurial inertia is the result of the uncertainty faced by potential entrants, when incumbents significantly perform category recombination. We distinguish the extent and the mode of category recombination as the two mechanisms whereby incumbents alter categories and unleash the uncertainty leading to entrepreneurial inertia. We further contend that entrepreneurial inertia can be mitigated with the status signals emitted by categories. Evidence from the market for electronic music analyzed along three decades is presented, and implications for extant literature are examined.