Do U.S. Firms’ Differences in Resource Allocation Patterns Affect their Strategic Choice? : Diversification Mode in the Broadband Television Industry
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Abstract
This study investigates how the resource allocation pat-terns of U.S. firms have an impact on their strategic choice between merger/acquisition and alliance in the telecommunication industry. The study applies the resource-based view and transaction cost theory to the diversification mode of cable and telephone firms after the 1996 Telecommunication Act in the context of the broadband television market. The broadband television market is here defined as an existing and potential market providing all types of digitized video, audio, and data content, with which an integrated broadband system interconnected with the Internet backbone can serve TV households. The primary find-ing suggests that a firm is more likely to choose an alliance mode when it has an incentive to complement the lack of its knowledge-based re-sources such as R&D skills, technological know-how etc. However, multi-level determinants should be examined simultaneously with resources effects in the future study.
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