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Experience and scale and scope economies: trade‐offs and performance in development
Author(s) -
Macher Jeffrey T.,
Boerner Christopher S.
Publication year - 2006
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.540
Subject(s) - scope (computer science) , economies of scope , affect (linguistics) , scale (ratio) , empirical examination , industrial organization , economies of scale , business , empirical evidence , economies of agglomeration , economics , marketing , economic geography , microeconomics , computer science , psychology , philosophy , physics , communication , epistemology , quantum mechanics , programming language , actuarial science
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.