Value Chain Relatedness: Strategic Complementarities and Firm Performance
This study extends the literature on relatedness and firm performance to consider customer side as well as technological side relatedness. Recent studies indicate the importance of each source of relatedness but yield ambiguous findings regarding their impacts on performance. Conjecturing this ambiguity reflects methodological limitations related to prior studies? use of survey data to develop measures of relatedness, we instead develop a secondary data method to measure technological and customer relatedness for a large sample of U.S. firms from 1984 to 2004. Estimating a model in which relatedness and firm performance are simultaneously determined, we find that, unlike prior studies, each source of relatedness has a positive direct effect on firm performance and a positive indirect effect that reflects complementarity between each source of relatedness.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Web page: http://mccoll.queens.edu/|
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- Bowen, H.P. & Wiersema, M., 2007.
"International and product diversification: their interrelationship and impact on firm performance,"
Vlerick Leuven Gent Management School Working Paper Series
2007-6, Vlerick Leuven Gent Management School.
- Harry P. Bowen & Margarethe Wiersema, 2009. "International and Product Diversification: Their Interrelationship and Impact on Firm Performance," Discussion Paper Series 2009-04, McColl School of Business, Queens University of Charlotte.
- Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
- Montgomery, Cynthia A. & Hariharan, S., 1991. "Diversified expansion by large established firms," Journal of Economic Behavior & Organization, Elsevier, vol. 15(1), pages 71-89, January.
- Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
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