The Moderating Role of Complementary Technological Resources in the Diversifcation-Performance Relationship

Ludovic Dibiaggio, Maryam Nasyar and Lionel Nesta

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Abstract: This article analyzes the moderating role of complementary technological resources in the diversification–performance relationship. Our contention is that entry into a new market poses challenges to complementary resources that are already being exploited and that diversification thus comes at a substantial cost to the diversifying firm. Using a sample of the world's largest manufacturers, we find that the effect of diversification on productivity is positive for firms with an initially low level of overall technological complementarity. Firms that specialize and have existing complementarities are negatively affected by diversification because the process of unbundling and rebundling technological resources is disruptive to productive firms.

Keywords: Technological complementarity; Technological resources; Business diversification (search for similar items in EconPapers)
Date: 2014
Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03411769
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Published in Industrial and Corporate Change, 2014, 23 (5), pp.1357 - 1380

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Working Paper: The Moderating Role of Complementary Technological Resources in the Diversifcation-Performance Relationship (2014)
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