The relationship between geographic proximity and strategic posture: a longitudinal study of the U.S. fiberoptics industry

The purpose of this study is to investigate implications of geographic location for firm strategy and for the competitive climate in emerging higher technology industries. Hypotheses are generated based on concepts from institutional theory, transaction costs economics, economic geography, and strategic management. Specifically, tests are conducted to determine whether there is an association between establishments' geographic locations and the incidence of two collective strategies: strategic isomorphism and strategic complementarity. These tests are performed with respect to the U. S. flberoptics industry at three-year intervals during the period 1976-1994. Tests are also performed (using 1994 data) to assess the influence that research institutes and economically dominant firms have on collective strategy formation.

The study's summary finding is that, to date, there is little, if any, empirical support for an association between geographic location and strategic posture in the fiberoptics industry. While it is possible that the proposed phenomena do not occur in this industry, for all of the hypotheses there are several alternative explanations for the results. First, several of the findings suggest that too little time has elapsed for the proposed phenomena to be fully manifested in the fiberoptics industry. Second, some of the phenomena might be observable by changing sampling or measurement procedures. Third, certain characteristics of emerging higher technology industries might affect the strength of some hypothesized relationships. Based on the findings of this study, a number of suggestions are offered for further studies of the subject.