This paper investigates how the timing of first technological investment in nascent industries shapes product-market entrants’ subsequent exit patterns (failure vs M&A). Product-market entrants entered technologically either during the incubation (technology pioneers) or progressively along the emergence stage (fast-followers, followers, latecomers). Leveraging a unique dataset of firms in the US nascent commercial drone industry (2000-2019), we investigated firm exit patterns within and after the industry's nascent period. Drawing arguments from the first-movers advantages theory, results show that product-market entrants who are technology pioneers exit less via failure and more via M&A. Given their superior advantage, product-market entrants that invested in the emergence stage experienced different patterns: technology followers exit less via failure than fast-followers and latecomers, while fast-followers exit more via M&A than followers.
