The missing link between technological standards and value-chain governance: the case of patent-distribution strategies in the mobile-communication industry

In this paper we explore the effects of technological standards on the governance structure of production networks by investigating patent-distribution strategies in the global mobile-communication industry. Through a comparative analysis of two mobile-communication technology standards—GSM and CDMA—we find that there exist significantly different patent-distribution strategies which result in varied governance structure as well as power relations within seemingly similar production networks. Furthermore, the different social – institutional processes of standard setting and implementation of GSM and CDMA contribute to this varied governance structure to a significant degree. Thus, we highlight the role of patent-distribution strategies in influencing value-chain governance, and provide a dynamic view of technological standards.