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Path Dependence in the Evolution of the Business Portfolio Configuration of Large Multi-Business Firms
Journal
International Studies of Management and Organization
ISSN
0020-8825
ISSN-Digital
1558-0911
Type
journal article
Date Issued
2015-07-07
Author(s)
Alscher, Alexander
Abstract
Based on learning theory, this study introduces a distinction into three orders (zero, first, second) of path dependence. Applying econometric time series analysis (VAR models), we explore the order of path dependence in firms' investment, divestment and cooperation decisions. In extension to prior research, we not only investigate the order of path dependence for each type of portfolio decision but also investigate the order of path dependence in firms' collective portfolio decision-making. Results show differences in the orders of path dependence for the three types of portfolio decisions between firms. Moreover, the firms' collective portfolio activities display a different order of path dependence than when analyzing each portfolio activity separately indicating substantial interactions among them. In sum, our empirical analyses indicate the need to distinguish between different orders of path dependence, and demonstrate that an organizational activity is not only dependent on its general conditions as contingency theory argues, nor solely dependent on its own history as classical path dependence theory argues, but also dependent on the history of related activities
Language
English
Keywords
path-dependence
learning theory
econometric time series analysis
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Sharpe
Publisher place
Armonk, NY
Volume
45
Number
4
Start page
287
End page
318
Subject(s)
Division(s)
Eprints ID
77039