Management Papers

Document Type

Journal Article

Date of this Version

9-2009

Publication Source

Management Science

Volume

55

Issue

9

Start Page

1570

Last Page

1585

DOI

10.1287/mnsc.1090.1040

Abstract

For empirical work in the resource-based view of the firm, characterizing the resources that are responsible for firm growth is difficult because valuable resources are often tacit, ambiguous, or difficult to identify. This is a particular problem for empirical assessments that rely upon the concept of relatedness between resources to characterize the direction of growth of the firm. We tackle the problem for the general case by developing a general interindustry relatedness index. The index harnesses the relatedness information embedded in the multiproduct organization decisions of every diversified firm in the U.S. manufacturing economy. The index is general in that it can be used across industry contexts without requiring explicit identification of resources and it provides a percentile relatedness rank for every possible pair of four-digit Standard Industrial Classification manufacturing industries. The general index is tested for predictive validity and found to perform as expected. Applications of the index in strategy research are suggested.

Keywords

relatedness, resource-based view, corporate strategy

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Date Posted: 27 November 2017

This document has been peer reviewed.