Université de Strasbourg

Resource redeployability

Corporate Strategy and Value Creation Through Resource Redeployability

USIAS fellow: Timothy Folta

This project will formally develop and empirically test an emergent theory explaining how firms create value through diversification. Existing literature explains that diversification creates value by improving efficiency because firms can simultaneously share resources across multiple businesses. Our emerging theory explains a second benefit to diversification – firms gain flexibility to withdraw resources from declining businesses and redeploy them to growing ones.

Resource redeployment seems to be a common strategy, yet, there exists no research demonstrating how much firm value is attributable to having the flexibility to redeploy resources. Theoretical understanding of resource redeployability is in its nascent stage, and empirical confirmation is absent. Moreover, since existing research ascribes all diversification benefits to the first explanation, there are risks that it ascribes spurious support for the first explanation and leads to inaccurate advice to managers. The project will include an international conference in Strasbourg on the topic of corporate resource redeployability, inviting top scholars on the subject from around the world, and will result in original research papers and possibly a special issue or book.

Investissements d'Avenir