Skill relatedness and firm diversification
(2013) In Strategic Management Journal 34(3). p.297-316- Abstract
- Because of the importance of human capital, a firm's choice of diversification targets will depend on whether these targets offer opportunities for leveraging existing human resources. We propose to quantify the similarity of different industries' human capital or skill requirements, that is, the industries' skill relatedness, by using information on cross-industry labor flows. Labor flows among industries can be used to identify skill relatedness, because individuals changing jobs will likely remain in industries that value the skills associated with their previous work. Estimates show that firms are far more likely to diversify into industries that have ties to the firms' core activities in terms of our skill-relatedness measure than... (More)
- Because of the importance of human capital, a firm's choice of diversification targets will depend on whether these targets offer opportunities for leveraging existing human resources. We propose to quantify the similarity of different industries' human capital or skill requirements, that is, the industries' skill relatedness, by using information on cross-industry labor flows. Labor flows among industries can be used to identify skill relatedness, because individuals changing jobs will likely remain in industries that value the skills associated with their previous work. Estimates show that firms are far more likely to diversify into industries that have ties to the firms' core activities in terms of our skill-relatedness measure than into industries without such ties or into industries that are linked by value chain linkages or by classification-based relatedness. Copyright (C) 2012 John Wiley & Sons, Ltd. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/3577152
- author
- Neffke, Frank and Henning, Martin LU
- organization
- publishing date
- 2013
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- diversification, relatedness, human capital, labor flows, skills
- in
- Strategic Management Journal
- volume
- 34
- issue
- 3
- pages
- 297 - 316
- publisher
- John Wiley & Sons Inc.
- external identifiers
-
- wos:000313905200003
- scopus:84872807432
- ISSN
- 0143-2095
- DOI
- 10.1002/smj.2014
- language
- English
- LU publication?
- yes
- id
- 26201322-e8b4-461a-a116-eb48abd9f7d9 (old id 3577152)
- date added to LUP
- 2016-04-01 12:58:40
- date last changed
- 2022-04-21 18:55:21
@article{26201322-e8b4-461a-a116-eb48abd9f7d9,
abstract = {{Because of the importance of human capital, a firm's choice of diversification targets will depend on whether these targets offer opportunities for leveraging existing human resources. We propose to quantify the similarity of different industries' human capital or skill requirements, that is, the industries' skill relatedness, by using information on cross-industry labor flows. Labor flows among industries can be used to identify skill relatedness, because individuals changing jobs will likely remain in industries that value the skills associated with their previous work. Estimates show that firms are far more likely to diversify into industries that have ties to the firms' core activities in terms of our skill-relatedness measure than into industries without such ties or into industries that are linked by value chain linkages or by classification-based relatedness. Copyright (C) 2012 John Wiley & Sons, Ltd.}},
author = {{Neffke, Frank and Henning, Martin}},
issn = {{0143-2095}},
keywords = {{diversification; relatedness; human capital; labor flows; skills}},
language = {{eng}},
number = {{3}},
pages = {{297--316}},
publisher = {{John Wiley & Sons Inc.}},
series = {{Strategic Management Journal}},
title = {{Skill relatedness and firm diversification}},
url = {{http://dx.doi.org/10.1002/smj.2014}},
doi = {{10.1002/smj.2014}},
volume = {{34}},
year = {{2013}},
}