Reconfiguring Dependencies Through Acquisitions: A Resource Dependency Perspective


Resource Dependency

How to Cite

Reddy, R., & Park, S.-J. (2019). Reconfiguring Dependencies Through Acquisitions: A Resource Dependency Perspective. Journal of Business Strategies, 36(2), 62–74.


Organizations are embedded within ecosystems and develop varying degrees
of dependence based on the actors within their environment. In this study, we
investigate the effects dependency has on firms that rely heavily on a few major
customers for their revenue streams. We posit that an increase in dependence on a
small number of consumers will have an adverse effect on firm performance (ROA).
Furthermore, we assert that firms acquiring other firms in order to counteract these
negative repercussions actually demonstrate an improvement in their performance.
To test this hypothesis, we conducted an empirical analysis using 12,038 firm-year
observations and our empirical results lend support to our predictions.

This article is distributed using a Creative Commons Attribution-NonCommercial 4.0 license. Copyright remains with the author(s).