The Nanoeconomics of Firm‐Level Decision‐Making and Industry Evolution : Evidence from 200 Years of Paper and Pulp Making
Year of publication
2020
Authors
Lamberg, Juha-Antti; Peltoniemi, Mirva
Abstract
Research summary We explore the qualitative differences in entries and exits over time. Using qualitative and quantitative data on 96 firms over 200 years, we study industry evolution from the perspective of individual decision‐making situations. Our historical and statistical analyses reveal the vital role of technology investments in determining firm outcomes, and the technological, institutional and governance dynamics that lead firms to invest or to abstain. Our main theoretical and methodological contribution concerns the importance of the multiplicity of firm‐level rationalities and decisions as fundamentals in theorizing on industry evolution. Managerial summary What determines firm outcomes in terms of acquisition, dissolution and survival? This paper answers this crucial question of strategy and elaborates on the extent to which the outcome is under top management control. Our findings highlight the importance of technology investments and we identify factors that make such investments possible and profitable. Our results emphasize that firms weighing options must assess the economic meaningfulness of generational technology investments which result in narrowing profit margins and intensifying competition. Another insight concerns the management of political risks. Long‐term fluctuations in regulation and foreign trade policy make it hazardous to optimize to the contemporary political regime. Skillful strategists invest in geographical and technological complexity, which in combination increase the chances of survival in rapidly changing political regimes.
Show moreOrganizations and authors
Publication type
Publication format
Article
Parent publication type
Journal
Article type
Original article
Audience
ScientificPeer-reviewed
Peer-ReviewedMINEDU's publication type classification code
A1 Journal article (refereed), original researchPublication channel information
Journal
Publisher
Volume
41
Issue
3
Pages
499-529
ISSN
Publication forum
Publication forum level
3
Open access
Open access in the publisher’s service
Yes
Open access of publication channel
Partially open publication channel
Self-archived
Yes
Article processing fee (EUR)
3307
Year of payment for the open publication fee
2019
Other information
Fields of science
Business and management
Keywords
[object Object],[object Object],[object Object],[object Object],[object Object]
Publication country
United Kingdom
Internationality of the publisher
International
Language
English
International co-publication
No
Co-publication with a company
No
DOI
10.1002/smj.3080
The publication is included in the Ministry of Education and Culture’s Publication data collection
Yes