An Empirical Model of Firm Behaviour A Dynamic Approach to Competence Accumulation and Strategic Behaviour

Abstract

The aim of this paper is to develop and implement an empirical model of firm behaviour. The data applied are patent applications taken out by 16 multinationals within telecommunications. The first dimension of the model deals with the strategic behaviour of firms. Second dimension deals with the accumulation of technological competencies, and finally a test of persistence and diversification in the technological profile of the single firm over time is carried out. Three types of results are reported: 1. For a small number of firms the process of accumulating technological competencies is very unstable leading to fragile competence bases. 2. The main part of the firms experience incremental accumulation of technological competencies over time even though the environment is highly dynamic. 3. For some firms the dynamics of the environment through competitor activities influence the accumulation of technological competencies to such a degree that the strategic intent is not reflected in the competence base. These findings support the theoretical argument that the resource-based view is too narrow and should include the dynamic effects imposed upon the firm by the environment in which the firm operates

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