Experience and scale and scope economies: trade‐offs and performance in development

Jeffrey Thomas Macher · Christopher S. Boerner

126 citations0/0 files storedStrategic Management Journal

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Innovation and Knowledge Management International Business and FDI Firm Innovation and Growth

Abstract

Abstract This paper examines how knowledge created by firm experience (learning economies) and scale and scope economies affect performance in firms' development activities. The empirical results suggest that each factor has a significant effect on development performance. Moreover, knowledge that results from greater experience within a particular technological area, when combined with knowledge spillovers from greater scope in other technological areas, significantly improves development performance. The results suggest that experience shapes and facilitates firms' abilities to absorb knowledge spillovers. Our empirical findings thus provide a more nuanced examination of the drivers of performance and have implications for the management of firms' development activities. Copyright © 2006 John Wiley & Sons, Ltd.

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References

1990Absorptive Capacity: A New Perspective on Learning and Innovation 1984A resource‐based view of the firm 2003The Theory of Economic Development 1991Exploration and Exploitation in Organizational Learning 1983An Evolutionary Theory of Economic Change.1996Toward a knowledge‐based theory of the firm 1997Capitalism, Socialism and Democracy 1993The myopia of learning

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