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Research Summary: Digital firms tend to be both narrow in their vertical scope and large in their scale. We explain this phenomenon through a theory about how attributes of firms' resource bundles impact their scale and specialization. We posit that highly scalable resource bundles entail significant opportunity costs of integration (vs. outsourcing), which simultaneously drive "hyperspecialization" and "hyperscaling" in digital firms. Using descriptive theory and a formal model, we develop several propositions that align with observed features of digital businesses. We offer a parsimonious modeling framework for resource‐based theorizing about highly scalable digital firms, shed light on the phenomenon of digital scaling, and provide insights into the far‐reaching ways that technology‐enabled resources are reshaping firms in the digital economy. Managerial Summary: Why are leading firms in the digital economy simultaneously larger and more specialized than those in the industrial age? Our research explains this phenomenon as being driven by the scalability of digital resources—that is, their capacity to create more value at larger scales when used intensively in a focal activity. We clarify what digital scalability means, and highlight trade‐offs created by the opportunity costs of not employing scalable digital resources intensively. Digital firms should outsource complementary activities to avoid diverting resources away from their scalable core, and to enhance their ability to grow exponentially. Although resource fungibility and outsourcing costs mitigate these imperatives, digital firms may nonetheless find it profitable to remain specialized despite the challenges of managing outsourcing and sharing value with complementors. Video abstract [ABSTRACT FROM AUTHOR]

A survey reveals that from the start of 2005 to the end of 2006, firms lost almost 30% of their human capital. Traditional solutions focus on suppressing employee mobility. The benefits of employee turnover are examined.

Drawing on the resource-based view (RBV), this paper examines how the combination or bundling of resources influences firm-patenting performance. We hypothesize that firm-patenting output depends not only on research and [...]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jebo.2006.05.012 Byline: Scott Shane (a), Deepak Somaya (b) Keywords: Patents; Litigation; Licensing; Universities; Public policy Abstract: One effect of increased patenting by universities over the past 20 years has been a rise in lawsuits to enforce university patent rights. In this paper we ask what effect patent litigation has on university efforts to license technology. Using secondary data on licensing and interviews with technology licensing office (TLO) directors for research universities, we find both qualitative and quantitative evidence that patent litigation has an adverse effect on university licensing activity. Our interviews suggest that this adverse effect occurs because litigation disrupts overall TLO activity, and reduces the time and resources available for marketing technologies and establishing licenses. Author Affiliation: (a) Weatherhead School of Management, Case Western Reserve University, 11119 Bellflower Road, Cleveland, OH 44106, United States (b) Robert H. Smith School of Business, University of Maryland, Van Munching Hall, College Park, MD 20742, United States Article History: Received 16 June 2005; Accepted 19 May 2006

Research has long recognized the importance of collaboration for innovation, but relatively little is known about the strategic drivers of collaborative innovation in firms. We posit that robust collaboration within firms can increase the interfirm mobility of inventors and increase spillovers of innovative knowledge to competitors by mobile inventors. Therefore, by mitigating these value capture hazards associated with collaboration, barriers to employee mobility may induce firms to increase collaborativeness in innovation. Additionally, consistent with the mechanism underlying this proposition, we hypothesize that firms whose innovation entails more complex knowledge, which is known to impede interfirm knowledge spillovers, will increase collaboration less when employee mobility increases. We test these hypotheses by leveraging quasi-exogenous changes in two legal mobility barriers for inventors across U.S. states and find that higher-mobility barriers are associated with greater inventor collaboration (as observed in patented innovation), and this effect is weaker for firms possessing more complex knowledge. These findings deepen our understanding of the strategic tradeoffs between value creation and value capture entailed in collaborative innovation within firms and of human capital strategies that help to manage these tradeoffs. [ABSTRACT FROM AUTHOR]