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Technological diversification, core-technology competence, and firm growth

Lookup NU author(s): Dr Jungho KimORCiD

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Abstract

This paper investigates, using a unique panel dataset of Korean manufacturing firms, the relationship between technological diversification and firm growth and the conditioning role of firm-specific core-technology competence in the relationship. First, the relationship is inverted U-shaped regardless of the type of technological diversification, implying that both insufficient and excessive technological diversifications are harmful for firm growth. Second, the level of competence in the field of core technology conditions the relationship by attenuating the harmful effect of excessive technological diversification. Furthermore, in case of unrelated technological diversification, the inverted U-shaped relationship weakens substantially for firms with high core-technology competence. These results suggest that sufficient core-technology competence is needed for firms to effectively manage and utilize technological diversification, particularly unrelated one, for their growth.

Publication metadata

Author(s): Kim J, Lee CY, Cho Y

Publication type: Article

Publication status: Published

Journal: Research Policy

Year: 2016

Volume: 45

Issue: 1

Pages: 113-124

Print publication date: 01/02/2016

Online publication date: 22/10/2015

Acceptance date: 16/07/2015

ISSN (print): 0048-7333

ISSN (electronic): 1873-7625

Publisher: Elsevier

URL: https://doi.org/10.1016/j.respol.2015.07.005

DOI: 10.1016/j.respol.2015.07.005

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