Does the sequencing of related and unrelated export diversification matter? Evidence from Colombian exporters

Dirk Boehe and Alfredo Jiménez

International Business Review, 2018, vol. 27, issue 6, 1141-1149

Abstract: How does related or unrelated geographic diversification affect future related or unrelated product diversification of exporting firms, and vice-versa? This question addresses an unresolved debate, and it is important for firms in developing countries that seek to expand their product and geographical markets. Our study contributes to a current debate by highlighting the relevance of the temporal sequence and the relatedness of international diversification. Expanding the classic transaction costs and the resource-based explanations, we argue that organizational learning as well as organizational and sales (in-)efficiencies (notably through resource and product cannibalization, negative transfer and coordination costs) affect the interrelationships between product and geographic diversification. Using a panel dataset of over 14,000 firm-year observations from exporters based in Colombia, we find that (1) related geographic diversification tends to increase future product diversification; (2) related product diversification tends to decrease future geographic diversification; and (3) unrelated product diversification tends to increase future geographic diversification.

Keywords: Export diversification; Product and market relatedness; Organizational learning; Colombian exporters (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:27:y:2018:i:6:p:1141-1149

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DOI: 10.1016/j.ibusrev.2018.04.005

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