Technological capability, transactional capability and firm boundaries

Abstract

Although there is research pertaining to the boundaries of firms, this field of study still requires more development. The objective of this paper is to analyse firm boundaries considering technological and transactional capabilities. The method chosen was that of multiple case studies conducted in firms having different technological intensity levels. The main results are contained in three propositions. Firstly, all industrial firms have technological and transactional capability. Secondly, firms with more developed capabilities (technological and transactional) expand their boundaries. Thirdly, the firms are able to expand their boundaries by means of the accumulation of technological capability, transactional capability, or both. As a conclusion to this paper, technological and transactional capabilities are essential for expanding the boundaries of firms at any level of technological intensity.