The survivor principle holds that the competitive process weeds out inefficient firms, so that hypotheses about efficient behavior can be tested by observing how firms actually behave. This principle underlies a large body of empirical work in strategy, economics, and management. But do...

Which is more innovative: the decentralized, diversified corporation or the smaller, more narrowly focused entrepreneurial firm? The economics and finance literatures argue that larger, diversified firms have natural innovation advantages, as their operating units have access to an internal...