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ABSTRACT Climate economics is undergoing rapid transformation, reconfiguring the foundations of sustainability transitions. This study develops a systems‐based perspective that foregrounds the strategic role of cross‐sectoral interconnectedness and transition brokers in shaping these transitions. Cross‐sectoral interconnectedness—linking previously disconnected sectors such as renewable energy, ICT and mobility—emerges as a critical mechanism through which value is created and coordinated across sectors. Using an abductive approach, this study combines analogical reasoning with longitudinal logit regression analysis of 186 acquisitions and joint ventures (JVs) in the solar photovoltaic sector (1997–2021), alongside 296 diversification transactions into other renewable energy domains. The findings show that firms engaging in cross‐sectoral diversification exhibit lower failure rates than nondiversifying firms, highlighting diversification as a commercially viable transition strategy. Furthermore, diversification, implemented through mergers and acquisitions (M&As) and JVs, functions as a strategic mechanism that enables the formation of brokerage positions within interorganisational networks. It also fosters the emergence of brokers—intermediary actors that facilitate value transfer and coordinate technological integration across sectors. These brokers play a pivotal role in enabling systemic transitions toward low carbon economies by linking innovation pathways and capital flows.
Ionna Trofimova‐Elliot (Sat,) studied this question.