The endogenous relationship between innovation and diversification, and the impact of technological resources on the form of diversification

This research has endeavoured to build on earlier research on the relationship between a firm's technological resources and the direction of its diversification, by trying to confirm the endogeneity of this relationship and by addressing the influence of innovation on the choice of the mode of diversification. Based on a sample of Spanish firms, our results suggest that innovation drives diversification, but not the reverse. The second important finding of this research is the empirical confirmation that knowledge assets are not related to the diversification mode.