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Tuesday, August 24

  1. page home edited The Strategy Reader (Get pdf version here Ph.D. reader1.0-1.pdf) Each of the reading lists an…

    The Strategy Reader
    (Get pdf version here Ph.D. reader1.0-1.pdf)
    Each of the reading lists and commentaries included in this reader is designed as a stand-alone resource on an important research topic within strategy. There are nonetheless many areas of intersection among the lists, and opportunities for combining these resources in interesting ways. The following brief summary of topics highlights linkages among the lists based on the ordering of the lists in the table of contents. We hope that this provides a useful tool for navigating the reader content, but stress that this represents only one of many ways in which the reading lists can be organized and we invite each user to digest and recombine the content however best suits their needs. Our collective view of what constitutes high quality research in strategy can be found here.
    Table of contents
    ...
    Organizational Learning (bibliography)
    Fit (bibliography)
    ...
    otherwise unprofessional.
    There is also a pdf version of the reader available here Ph.D. reader1.0-1.pdf Please note, however, that the pdf version may not reflect the most recent changes to the online version

    Brought to you by the Strategy Research Initiative.
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Monday, August 23

  1. page home edited ... Entry (appendix, bibliography) Innovation (bibliography) Corporate Diversification (bibliog…
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    Entry (appendix, bibliography)
    Innovation (bibliography)
    Corporate Diversification (bibliography)
    Industry Evolution (bibliography)
    External Influences
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  2. page Industry Dynamics edited Industry Dynamics ... related to Corporate Diversification , Innovation is a huge topic, an…

    Industry Dynamics
    ...
    related to Corporate Diversification ,
    Innovation is a huge topic, and one of central interest to many strategy scholars. In his reading list on the topic, Bruno Cassiman goes back to basics, to early IO theory and an analysis of the incentives for R&D and innovation. He then goes on to look at other elements of the firm environment affecting the incentive to invest in R&D and innovation. The focus is primarily on theoretical developments in the field reflecting Cassiman’s view that “we still do not have theoretical models that predict sufficiently well the observed phenomenon”; recent empirical applications in strategy research are also highlighted.
    Belen Villalonga notes in her reading list on Corporate Diversification that this is one of the oldest topics in strategy research. For several decades strategy scholars have worked to understand the causes and consequences of diversification, focusing in particular on the degree of “relatedness” among a firm’s businesses. In her commentary Villalonga guides the reader through the evolution of the field, including the development of several key stylized facts such as the well-known “diversification discount,” but also highlights more recent work that challenges these stylized facts and opens up new avenues for future research
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  3. page Industry Dynamics edited Industry Dynamics ... emerge with other other topics included ... also highlighted. B…

    Industry Dynamics
    ...
    emerge with otherother topics included
    ...
    also highlighted.
    Belen Villalonga notes in her reading list on Corporate Diversification that this is one of the oldest topics in strategy research. For several decades strategy scholars have worked to understand the causes and consequences of diversification, focusing in particular on the degree of “relatedness” among a firm’s businesses. In her commentary Villalonga guides the reader through the evolution of the field, including the development of several key stylized facts such as the well-known “diversification discount,” but also highlights more recent work that challenges these stylized facts and opens up new avenues for future research
    In Industry Evolution , Brian Silverman looks at the combined effect of entry, exit and growth on cumulative changes in industry characteristics over time. In tracing the development of the literature, Silverman notes the impressive progression from models in which industry change is exogenously imposed to those that grapple with endogenously driven change. The literature also encompasses an impressive diversity of theoretical perspectives, including theories rooted in traditional industrial organization, evolutionary economics, and more sociological perspectives – organizational ecology, resource partitioning and niche overlap. Recent work has also paid increasing attention to firm heterogeneity (providing a link to, for example, Sustainability ), and geography (see Geography and Agglomeration ).
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  4. page Industry Dynamics edited ... Industry Dynamics In her list on Entry Anne Marie Knott focuses on research aimed at answerin…
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    Industry Dynamics
    In her list on Entry Anne Marie Knott focuses on research aimed at answering two important questions: (i) When are firms driven to enter new markets?; and (ii) Is entry viable? In exploring this fundamental topic, important links emerge with other topics included in the reader, most notably issues related to Diversification , Sustainability , Industry Evolution and Industry and Firm Effects . In the interests of focus, Knott limits her attention primarily to the incentives for incumbents to enter new markets; see Innovation for some of the different incentives facing new entrants.
    ...
    also highlighted.
    Belen Villalonga notes in her reading list on Corporate Diversification that this is one of the oldest topics in strategy research. For several decades strategy scholars have worked to understand the causes and consequences of diversification, focusing in particular on the degree of “relatedness” among a firm’s businesses. In her commentary Villalonga guides the reader through the evolution of the field, including the development of several key stylized facts such as the well-known “diversification discount,” but also highlights more recent work that challenges these stylized facts and opens up new avenues for future research

    In Industry Evolution , Brian Silverman looks at the combined effect of entry, exit and growth on cumulative changes in industry characteristics over time. In tracing the development of the literature, Silverman notes the impressive progression from models in which industry change is exogenously imposed to those that grapple with endogenously driven change. The literature also encompasses an impressive diversity of theoretical perspectives, including theories rooted in traditional industrial organization, evolutionary economics, and more sociological perspectives – organizational ecology, resource partitioning and niche overlap. Recent work has also paid increasing attention to firm heterogeneity (providing a link to, for example, Sustainability ), and geography (see Geography and Agglomeration ).
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  5. page Industry Dynamics edited Industry Dynamics ... and (ii) Whether a firm should enter a particular market, or Is ent…

    Industry Dynamics
    ...
    and (ii) Whether a firm should enter a particular market, or Is entry
    ...
    related to Diversification , Sustainability ,
    Innovation is a huge topic, and one of central interest to many strategy scholars. In his reading list on the topic, Bruno Cassiman goes back to basics, to early IO theory and an analysis of the incentives for R&D and innovation. He then goes on to look at other elements of the firm environment affecting the incentive to invest in R&D and innovation. The focus is primarily on theoretical developments in the field reflecting Cassiman’s view that “we still do not have theoretical models that predict sufficiently well the observed phenomenon”; recent empirical applications in strategy research are also highlighted.
    In Industry Evolution , Brian Silverman looks at the combined effect of entry, exit and growth on cumulative changes in industry characteristics over time. In tracing the development of the literature, Silverman notes the impressive progression from models in which industry change is exogenously imposed to those that grapple with endogenously driven change. The literature also encompasses an impressive diversity of theoretical perspectives, including theories rooted in traditional industrial organization, evolutionary economics, and more sociological perspectives – organizational ecology, resource partitioning and niche overlap. Recent work has also paid increasing attention to firm heterogeneity (providing a link to, for example, Sustainability ), and geography (see Geography and Agglomeration ).
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  6. page Diversification edited Corporate Diversification Contributed by Belén Villalonga ... Given the importance of the …

    Corporate Diversification
    Contributed by Belén Villalonga
    ...
    Given the importance of the role played by relatedness in the diversification-performance relation, its measurement––and more broadly, the measurement of diversification––has proven to be critical to the observed empirical relation. Wrigley (1970) and Rumelt (1974) pioneered the use of categorical measures of diversification based on the relatedness among the firm’s businesses. Jacquemin and Berry (1979) devised a continuous measure of diversification labeled “entropy” that allows a more objective separation between related and unrelated diversification and has been very widely used. A common critique to most measures of relatedness including the entropy one, however, is that they are anchored on the Standard Industrial Classification (SIC) system, which is arguably not ideal for this purpose. Several studies have come up with clever and objective measures of relatedness that do not rely on SIC codes: Lemelin (1982) uses input-output tables to classify relationships between pairs of industries as vertical or complementary in either inputs or outputs. Farjoun (1998) uses data from the Bureau of Labor Statistics about the distribution of job categories across industries to construct measures of skill-based relatedness. Robins and Wiersema (1995) use a technology input-output matrix developed by Scherer (1982) to create measures of relatedness at both the industry and firm levels. Silverman (1999) uses patent data to create an alternative measure of technological relatedness. In an unpublished working paper that eventually got subsumed into Teece, Rumelt, Dosi and Winter (1994), Rumelt devised a measure of relatedness based on the relative frequency with which pairs of activities are combined within the same corporation.
    In the mid- and late 1990s, the center of gravity of the literature about diversification and performance shifted from the strategy field to the finance field—where it opened a can of worms. The conventional wisdom about the value of corporate diversification in U.S. stock markets had evolved toward the view that diversified firms as a whole traded at an discount relative to the sum of their parts––the so-called “diversification discount” or “conglomerate discount.” Two academic studies came to provide empirical support for this view: Lang and Stulz (1994) and Berger and Ofek (1995). In 1999 two working papers took issue with the interpretation of these findings as evidence that diversification was value-destroying: Campa and Kedia (ultimately published in 2002), and Villalonga (ultimately published in 2004a). The two papers raise essentially the same point, but use different empirical methods to tackle it. The point is that, as the vast strategy literature on diversification motives suggests, firms do not diversify randomly, and once this self-selection is controlled for econometrically, the alleged diversification discount disappears or even turns into a premium. In this reader, I have only included the latter paper (admittedly self-servingly) because, in addition to its substantive findings about diversification and firm value (for which I fully share credit with Campa and Kedia), it made another significant contribution: It was the first paper to introduce the propensity score matching method to the field of finance, where it has now become fairly standard.
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    accounting profitability.
    Bibliography

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  7. page Bibliography - Diversification edited (back to Corporate Diversification) ... asterisk (*); those that came from research coming…

    (back to Corporate Diversification)
    ...
    asterisk (*); those that came fromresearch coming out of doctoral dissertations areis indicated by "DOC";"DOC" following the reference; review papers are markedsimilarly indicated by “R”
    Diversification Motives
    R Hoskisson,Hoskisson, R.E. and
    ...
    (2), 461–509. (R)
    Merino, F. and D.R. Rodríguez (1997), “A consistent analysis of diversification decisions with non-observable firm effects,” Strategic Management Journal, 18 (9), 733–743.
    *R* Montgomery, C.A.
    ...
    (3), 163–178. (R)
    Montgomery, C.A. and S. Hariharan (1994), “Diversified expansion by large established firms,” Journal of Economic Behavior and Organization, 15, 71–89.
    Panzar, J.C. and Willig, R.D. (1981), “Economies of scope,” American Economic Review, 71 (2), 268–272.
    ...
    Teece, D.J. (1982), “Toward an economic theory of the multiproduct firm,” Journal of Economic Behavior and Organization, 3, 39–63.
    Relatedness, Diversification, and their Empirical Measurement
    DOC Davis,Davis, R. and
    ...
    (7), 511–524.
    DOC Farjoun,
    (DOC)
    Farjoun,
    M. (1998),
    ...
    (7), 611–630. (DOC)
    Jacquemin, A.P. and C.H. Berry (1979), “Entropy measure of diversification and corporate growth,” Journal of Industrial Economics, 27, 359–369.
    * Lemelin, A. (1982), “Relatedness in patterns of inter-industry diversification,” Review of Economics and Statistics, 64, 646–657.
    Robins, J. and M.F. Wiersema (1995), “A resource-based approach to the multibusiness firm: Empirical analysis of portfolio interrelationships and corporate financial performance,” Strategic Management Journal, 16 (4), 277–299.
    * DOC Silverman, B.S.
    ...
    (8), 1109–1124.
    Teece,
    (DOC)
    Teece,
    D.J., R.P.
    ...
    23, 1–30.
    Diversification’s Effect on Firm Performance
    R Barney,Barney, J.B. (1996):
    ...
    (“Diversification strategies”). (R)
    * Berger, P.G. and E. Ofek (1995), “Diversification’s effect on firm value,” Journal of Financial Economics (37), 39–65.
    Lang, L.H.P., and R.M. Stulz (1994), “Tobin’s q, corporate diversification, and firm performance,” Journal of Political Economy, 102 (6), 1248–1280.
    R Martin,Martin, John D.,
    ...
    9, 37–57.
    R Ramanujam,
    (R)
    Ramanujam,
    V. and
    ...
    (6), 523–551.
    * DOC
    (R)
    *
    Rumelt, R.P.
    ...
    Boston, MA.
    *R
    (DOC)
    *
    Villalonga, Belén
    ...
    (SSRN), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=402220
    * DOC
    (R)
    *
    Villalonga, Belén
    ...
    (2), 5–27.
    DOC Villalonga,
    (DOC)
    Villalonga,
    Belén (2004b),
    ...
    59, 479–506. (DOC)
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  8. page Bibliography - Diversification edited (back to Corporate Diversification) Core readings are marked with an asterisk (*); those that cam…
    (back to Corporate Diversification)
    Core readings are marked with an asterisk (*); those that came from doctoral dissertations are indicated by "DOC"; review papers are marked “R”
    Diversification Motives
    R Hoskisson, R.E. and M.A. Hitt (1990), “Antecedents and performance outcomes of diversification: A review and critique of theoretical perspectives,” Journal of Management, 16 (2), 461–509.
    Merino, F. and D.R. Rodríguez (1997), “A consistent analysis of diversification decisions with non-observable firm effects,” Strategic Management Journal, 18 (9), 733–743.
    *R Montgomery, C.A. (1994), “Corporate diversification,” Journal of Economic Perspectives, 8 (3), 163–178.
    Montgomery, C.A. and S. Hariharan (1994), “Diversified expansion by large established firms,” Journal of Economic Behavior and Organization, 15, 71–89.
    Panzar, J.C. and Willig, R.D. (1981), “Economies of scope,” American Economic Review, 71 (2), 268–272.
    * Penrose, E.T. (1959), The Theory of the Growth of the Firm. Wiley, N.Y.
    Teece, D.J. (1980), “Economies of scope and the scope of the enterprise,” Journal of Economic Behavior and Organization, 1, 223–247.
    Teece, D.J. (1982), “Toward an economic theory of the multiproduct firm,” Journal of Economic Behavior and Organization, 3, 39–63.
    Relatedness, Diversification, and their Empirical Measurement
    DOC Davis, R. and I.M. Duhaime (1992), “Diversification, vertical integration, and industry analysis: New perspectives and measurement,” Strategic Management Journal, 13 (7), 511–524.
    DOC Farjoun, M. (1998), “The independent and joint effects of the skill and physical bases of relatedness in diversification,” Strategic Management Journal, 19 (7), 611–630.
    Jacquemin, A.P. and C.H. Berry (1979), “Entropy measure of diversification and corporate growth,” Journal of Industrial Economics, 27, 359–369.
    * Lemelin, A. (1982), “Relatedness in patterns of inter-industry diversification,” Review of Economics and Statistics, 64, 646–657.
    Robins, J. and M.F. Wiersema (1995), “A resource-based approach to the multibusiness firm: Empirical analysis of portfolio interrelationships and corporate financial performance,” Strategic Management Journal, 16 (4), 277–299.
    * DOC Silverman, B.S. (1999), “Technological resources and the direction of corporate diversification: Toward an integration of the Resource-Based View and Transaction Cost Economics,” Management Science 45 (8), 1109–1124.
    Teece, D.J., R.P. Rumelt, G. Dosi, and S.G. Winter (1994), “Understanding corporate coherence,” Journal of Economic Behavior and Organization, 23, 1–30.
    Diversification’s Effect on Firm Performance
    R Barney, J.B. (1996): Gaining and Sustaining Competitive Advantage. Addison-Wesley, Reading, MA, Chapter 11 (“Diversification strategies”).
    * Berger, P.G. and E. Ofek (1995), “Diversification’s effect on firm value,” Journal of Financial Economics (37), 39–65.
    Lang, L.H.P., and R.M. Stulz (1994), “Tobin’s q, corporate diversification, and firm performance,” Journal of Political Economy, 102 (6), 1248–1280.
    R Martin, John D., and Akin Sayrak, 2003, Corporate diversification and shareholder value, Journal of Corporate Finance 9, 37–57.
    R Ramanujam, V. and P. Varadarajan (1989), “Research on corporate diversification: A synthesis,” Strategic Management Journal, 10 (6), 523–551.
    * DOC Rumelt, R.P. (1974), Strategy, Structure, and Economic Performance, Division of Research, Harvard Business School, Boston, MA.
    *R Villalonga, Belén (2003), “Research Roundtable Discussion: The diversification discount,” Financial Economics Network FEN-Educator Series, Social Science Research Network (SSRN), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=402220
    * DOC Villalonga, Belén (2004a), “Does diversification cause the ‘diversification discount’?,” Financial Management 33 (2), 5–27.
    DOC Villalonga, Belén (2004b), “Diversification discount or premium? New evidence from the Business Information Tracking Series,” Journal of Finance, 59, 479–506.

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