Where do capabilities reside? Analysis of related technological diversification in multi-locational firms

Where do businesses source the capabilities that influence their diversification? From the resource-based perspective, capabilities are located within the firm. For many economic geographers, capabilities are place-based and flow between firms in local areas. Others claim the capabilities that count emerge from non-local collaboration. The value added of this paper is a firm-establishment-patent dataset that helps identify the sources of capabilities regulating technological diversification in the establishments of multi-locational firms. Results show that capabilities located within establishments themselves are most important to the process of diversification, followed by firm capabilities and then place-based capabilities.

Automated summary

This paper investigates the sources of capabilities that influence diversification in businesses. The findings reveal that capabilities located within establishments are the most significant, followed by firm capabilities and then place-based capabilities.