Opportunity costs, industry dynamics, and corporate diversification: Evidence from the cardiovascular medical device industry, 1976-2004

• 成果类型: Article
• 署名作者: Wu, Brian
• 署名单位: University of Michigan System; University of Michigan
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2069
• 发表日期: 2013
• 页码: 1265-1287
• 关键词: opportunity costs; non-scale free capabilities; relative demand maturity; corporate diversification; self-selection; cardiovascular medical device

摘要

This paper examines how demand conditions across alternative markets impact diversification decisions and firm performance by influencing the opportunity costs of deploying non-scale free capabilities. Using data within the cardiovascular medical device industry, this study shows that: (1) firms with a larger stock of pre-entry innovation experience are more likely to diversify; (2) firms in a current market with greater relative demand maturity are more likely to diversify; (3) diversification is associated with a performance decrease in the current market; and (4) diversification is associated with a performance increase at the corporate level. These findings shed new light on the self-selection process of corporate scope, the conceptualization of firm capabilities, and the connection between industry dynamics and resource deployment. Copyright (c) 2013 John Wiley & Sons, Ltd.