Why There? Decomposing the Choice of Target Industry

31 Pages Posted: 20 Feb 2010

See all articles by Lasse B. Lien

Lasse B. Lien

Norwegian School of Economics (NHH)

Peter G. Klein

Baylor University - Hankamer School of Business; Norwegian School of Economics (NHH) - Department of Strategy and Management; Ludwig von Mises Institute

Date Written: February 19, 2010

Abstract

How do diversifying firms chose their target industries? We use two population-level samples and new measures of relatedness to decompose the determinants of diversifying entry into internal factors (firm-specific resources and capabilities) and external factors (industry attractiveness). Our approach captures a variety of sources and types of relatedness and includes measures of resource strength as well as resource relevance, giving us a highly general picture of the drivers of diversification.

Keywords: Resource-based view, industry positioning, firm capabilities, diversification, entry

JEL Classification: L22, L11, G34

Suggested Citation

Lien, Lasse B. and Klein, Peter G., Why There? Decomposing the Choice of Target Industry (February 19, 2010). Available at SSRN: https://ssrn.com/abstract=1555924 or http://dx.doi.org/10.2139/ssrn.1555924

Lasse B. Lien

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, 5045
Norway
+47 55959726 (Phone)

Peter G. Klein (Contact Author)

Baylor University - Hankamer School of Business ( email )

Waco, TX 76798
United States
254-710-4903 (Phone)

Norwegian School of Economics (NHH) - Department of Strategy and Management ( email )

Breiviksveien 40
N-5045 Bergen
Norway

Ludwig von Mises Institute ( email )

Auburn, AL
United States

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