No abstract

In this work we develop an analytical framework to examine the effects of strategic investments on the financial policy of the firm. From the resource‐based approach of the firm, nontradable and difficult‐to‐copy assets are the basis of a sustainable competitive advantage. However, imperfections in the resource markets can also be interpreted as sources of costs and/or restrictions from a financial point of view. Specificity and opacity are the features of strategic resources that enable us to identify the financial implications of the resource‐based strategy. We have tested our theoretical framework using a sample of Spanish nonfinancial firms. Our results show that highly specific and opaque resources limit the borrowing capacity of the firm, while other transparent strategic assets affect financial leverage positively. Our findings suggest two main implications for strategy formulation and implementation: (1) there are unobservable financial costs that must be considered for a correct evaluation of a sustainable competitive advantage based on strategic resources; and (2) the financial policy of a ‘resource‐driven’ firm is partially determined by the features of its strategic resource bundle. Copyright © 2001 John Wiley & Sons, Ltd.

The main purpose of this paper is to examine the effect of 'strategic moves' (or strategic change) on the likelihood of organizational survival in a population of firms which has undergone radical transformations in its environment. To this end, we propose and test two competitive hypotheses which are the result of two other theoretical perspectives about the consequences of strategic change: the adaptation view (classic strategic management and dynamic capabilities) and the ecological approach. While from the former, in general, it is assumed that strategic change has a positive effect on the likelihood of organizational survival, from the ecological approach, it is frequently argued that attempts at reorganization in general and strategic change in particular tend to be associated with an increase in the likelihood of organizational extinction. The sample used to test the two proposed hypotheses is the Spanish bank population over the period 1983-97. The results confirm the positive and significant effect of strategic moves (or strategic change) on the likelihood of organizational survival, in line with the conclusions of the adaptive perspective and other empirical research carried out in different settings. This paper introduces two important methodological innovations: (a) the definition and measurement of 'strategic moves' (or strategic change) by using a new cluster algorithm, the MCLUST; and (b) the control of the non-observable heterogeneity using panel data models for 'probit' regression.

This paper explores and tests the differences in downsizing behaviour depending upon three ownership-based traits of the largest Spanish companies: stock versus privately held corporations, foreign versus domestic firms and state-owned versus private companies. From a theoretical standpoint, we develop an explanatory model of downsizing that accounts for techno-economic, institutional, and socio-cognitive explanations which serves as a conceptual basis for generating hypotheses on the role of ownership in downsizing decisions. Probit estimates using a sample of large Spanish firms (1990—1998) confirm that stock corporations and state-owned firms engaged in a privatization process are more likely to downsize than privately held domestic companies. We found less conclusive results about the downsizing behaviour of foreign firms. Finally, our findings corroborate the relevance of organizational decline and institutional factors for predicting the downsizing event.

The article proposes an empirical framework able to: (1) assess the relative validity of both adaptive and inertial views of strategic change and (2) verify the potential time-or context-dependency by testing the structural stability of the empirical model, in Spanish banks, 1983Spanish banks, -1997. Results offer inconclusive findings regarding (1) but strong evidence to answer (2). The assumption of structural stability is rejected and the effect of many explanatory factors considered in the empirical model varies over time as some factors show different effects and/or significance levels depending on the period considered. These findings suggest that explanatory models of strategic change should be viewed as 'time-' or 'context-dependent'. The article provides a conceptual model in which alternative explanations operate in a sequential way. The results highlight, first, that inconclusive past findings about adaptive versus inertial views should be reviewed under this new evidence, and future empirical research must assure that its methods and interpretations are robust to potential structural breakdowns; and second, the limitations raised by the static approach offered by the available theories/models when approaching the dynamic and complex nature of strategic change. Theoretical developments and implications for managerial practice are suggested.