Diversification and performance of Japanese IT subsidiaries: a resource-based view

Authors:
Michael R. Wade;Jane I. Gravill
Affiliations:
Schulich School of Business, York University, Toronto, Canada;Richard Ivey School of Business, University of Western Ontario, London, Canada N6A 3K7
Venue:
Information and Management
Year:
2003

Citing 3
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Abstract

This paper examines the relationship between corporate diversification and performance for Japanese subsidiaries in the information technology (IT) industry. In particular, it reports on our study which drew on the resource-based view of the firm to make the distinction between related and unrelated diversification. Data for more than 5 years were used to test our hypotheses. The results suggest that related subsidiaries out-perform unrelated subsidiaries on a number of dimensions including: performance, survival, and employee productivity growth. The study also found support for resource-based arguments suggesting that related diversification in knowledge-based (tertiary) industries, such as IT, plays a more important factor in firm success than in primary or secondary industries.