The Resource-Based View of the firm (RBV) posits as a necessary condition for diversification that a firm's resources can be leveraged beyond its original business. To achieve sufficiency we need to know whether the resource is best leveraged inside the firm or through a market contract. We therefore couple the RBV with the Adjustment-Cost Theory of the firm to make and test a set of predictions about when firms should extend their scope. We find that firm should, and do, extend their hosizontal and vertical scope when they compete in industries with more fast paced new product development. Two strong points about the study are (1) Because we are specific about the theory of the firm invoked, we can make more precise predictions, and (2) we test the predictions in production functions as well as in estimates of actual firm scope
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Massachusetts Institute of Technology (MIT), Sloan School of Management in its series Working papers with number
4277-03.
Length: Date of creation: 03 Feb 2003 Date of revision: Handle: RePEc:mit:sloanp:1813
Contact details of provider: Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA Phone: 617-253-2659 Web page: http://mitsloan.mit.edu/ More information through EDIRC
Order Information: Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA
For technical questions regarding this item, or to correct its listing, contact: (Christian Zimmermann).
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: