A New Method to Quantify Firm Capabilities and Organize Them in a Hierarchical and Nested “Capabilities Ladder” (IMAGE)

Waseda University

A New Method to Quantify Firm Capabilities and Organize Them in a Hierarchical and Nested “Capabilities Ladder”

Caption

Using company annual reports and a nestedness algorithm, researchers have quantitatively measured firm capabilities and developed a capabilities ladder. It has three main steps representing basic, mid-level, and advanced capabilities. Firms progress from basic to mid and then to advanced capabilities, reflecting the nestedness of capability development.

Credit

Professor Alex Coad from Waseda Business School, Waseda University

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