 Roberts and Saloner (2013) credit Teece with “the first attempt to build a systematic theory of the firm scope based on profit-maximizing behavior” (827) in his 1982 article “Towards an Economic Theory of the Multiproduct Firm,” in which Teece describes the existence of excess resources in firms, stating that firms could better use those resources by diversifying into new lines of business.He also presents transaction cost arguments regarding whether resources can be shared contractually, and explains that protecting those resources is a potential basis for diversification.Teece additionally builds on Williamson (1975) in arguing that “internal capital allocation may be better than what the market can achieve” (828).