"Flexibility, Path Dependency and Efficiency in a Flexibly Competitive Network"

This study extends the study of Mizik and Jacobson (2003) and uses 6,649 published observations of 1,005 Taiwanese ICT firms during 1996-2010 to test arguments that in a flexibly competitive network, firms which strategically allocate resources on advantageous innovative activities obtain good financial performance: (1) Small-sized firms adapt to the environmental change with a 'flexibility strategy'; (2) medium-sized firms adapt to the environmental change by using 'flexibility' and 'path dependence strategy'; (3) large-sized large firms use strong financial position to appropriate value and adapt 'efficiency' strategies. This study provides evidence of moderating effect of path dependence in medium-sized firms and contributes to elucidate the transition mechanism between flexibility strategy of small- sized firms and efficiency strategy of large-sized firms in a flexibly competitive network, which reconfigures it adapting to environmental changes. This study also implies that managers decide their strategic emphasis either flexibility or efficiency emphasized when the firm grows to medium size.