Abstract
This paper analyzes the two economic perspectives underlying the contradictory results of existing studies regarding the relationship between diversity and performance and integrates them using the dynamic capability approach. Transaction cost economics suggests that knowledge diversity has a negative impact on cost‐saving performance, whereas evolutionary economics suggests that knowledge diversity has a positive impact on value‐creation performance. According to the dynamic capability approach, the perspective of transaction cost economics is shown to relate to ordinary capabilities, whereas the perspective of evolutionary economics is shown to relate to dynamic capabilities. The former should be pursued in subservience to the latter.
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