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A general interindustry relatedness index

Bryce, David J. and Winter, Sidney G. (2009) A general interindustry relatedness index. Management Science, 55 (9). pp. 1570-1585. ISSN 0025-1909

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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.

Item Type: Article
Official URL: http://mansci.journal.informs.org/
Additional Information: © 2009 Institute for Operations Research and Management Sciences
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales
Sets: Departments > Management
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 28 Jun 2012 08:26
URL: http://eprints.lse.ac.uk/44516/

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