LAUSR

This paper proposes and investigates three potential reasons (dimensions, capability order and contingency of technological diversification) which may explain why there are inconsistencies in the findings of studies on the relationship between technological diversification and firm performance. The results indicate that: (1) a more comprehensive definition is necessary, which combines the two dimensions of technological diversification (breadth and depth), which are positively linked to firm performance; (2) in low-tech firms, technological diversification serves as a higher-level capability resulting in higher performance; however, in high-tech firms, technological diversification serves as a zero-level capability that does not contribute to firm performance and (3) intangible complementary assets negatively moderate the relationship between technological diversification and performance. Further research should consider the two dimensions to reach a more comprehensive understanding of technological diversification. Firms should increase both the depth and breadth of their technological diversification to enhance performance.