# kaal:claim:2740477-010

**Claim.** Incumbent firms facing the competitive disadvantage created by disruptive entrants respond by using the existing regulatory process itself to build obstacles to competition, which converts rulemaking into an instrument of incumbent protection.

**Type.** mechanism  **Support.** argued

**Holds when.**

- incumbents perceive a threat from disruptive firms
- incumbents remain subject to rules the entrants avoid

**Source quote.**

> To counteract such disadvantages, incumbent firms that are exposed to a perceived threat of disruptive innovation from disruptive firms may attempt to use the existing regulatory process to create obstacles for disruptive firms to compete.

**From.** Wulf A. Kaal, Erik P.M. Vermeulen, *Venture Capital as Dynamic Regulation of Disruptive Innovation* (2016), IV. Disruptive Innovation as a Regulatory Challenge, page 18

**Cite as.** Wulf A. Kaal, Erik P.M. Vermeulen, Venture Capital as Dynamic Regulation of Disruptive Innovation (2016). SSRN: https://ssrn.com/abstract=2740477

**Verify.** sha256 of source PDF `c72871b76fa2ad5a8a69ee8d3defc8f64e624be9052ce763e79cf6c58883f726` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Vermeulen%20-%202016%20-%20Venture%20Capital%20as%20Dynamic%20Regulation%20of%20Disruptive%20Innovation.pdf

**Failure mode.** Incumbent weaponization of the regulatory process  (family: regulatory-capture-and-incumbent-advantage)

**Topics.** regulatory-failure, innovation

**Keywords.** regulatory-capture, incumbent-protection, disruptive-innovation, rent-seeking

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/2808132-011

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