Divestment of Strategic Resources in a Hypercompetitive, Capital Intensive, Knowledge Based Industry

Abstract

This dissertation creates a model explaining the factors that drive the decision by a semiconductor firm to divest a specific strategic resource. The dissertation is based on a case study of a medium size semiconductor firm that divested a competitively performing manufacturing facility in a low labor cost Asian country, and replaced the services it performed with contracted services. The study draws on competitive advantage, resource based view, transaction cost, divestment, international business, and asset-light model literature. The existing literature either fails to explain (or to explain completely) the reasons driving these type of divestiture decisions (resource based view, transaction cost economics, international business theory), or explains them only at a firm level (divestment and asset light theory). The contribution that this dissertation creates is a model that explains the decision at the specific strategic resource level, i.e. a theory of why one particular strategic resource would be divested by a firm, but not another.