Why There? Decomposing the Choice of Target Industry
31 Pages Posted: 20 Feb 2010
Date Written: February 19, 2010
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: Suggested Citation