Assessing the Resource Base of Japanese and U.S. Auto Producers: A Stochastic Frontier Production Function Approach

Abstract

T he "resource-based view of the firm" has become an important conceptual framework in strategic management but has been widely criticized for lack of an empirical base. To address this deficit, we utilize a new method for identifying interfirm differences in efficiency within the context of stochastic frontier production functions. Using data on Japanese and U.S. automobile manufacturers, we develop measures of resources and capabilities and test for linkages with firm performance. The results show the influence of manufacturing proficiency and scale economies at the firm and plant level. We apply the parameter estimates to account for Toyota's superior efficiency relative to other producers.

The impact of marketing capability, operations capability and diversification strategy on performance: A resource-based view

“…Thus, mere possession of superior resources cannot achieve competitive advantage for the firm, but how a firm deploys its scarce resources, put its capabilities to best use, invest and complement its existing capabilities infrastructure can bring "immobility and inimitability" to its resource-capability framework (Peteraf, 1993;Song et al, 2007). In marketing literature, there has been extensive use of RBV framework to analyze firm performance (Dutta, Narasimhan, & Surendra, 1999;Liebermann & Dhawan, 2005), to understand the interaction between marketing and other functional capabilities and their effect on performance (Song et al, 2007;Song, Droge, Hanvanich, & Calantone, 2005;Song, Nason, & Benedetto, 2008), and particularly to understand inter-organizational relationship performance (Palmatier, Dant, & Grewal, 2007). The results suggest that there is a significant relationship between capabilities and performance.…”

“…RBV theory suggests that each organization has a distinctive set of resources and capabilities, and some capabilities will have superior impact on financial performance than the others (Song, Benedetto, & Nason, 2007). Such difference in impact is attributed to the efficiency with which a firm is able to convert its resources into "valuable" "difficult to imitate" capabilities and into financial performance (Liebermann & Dhawan, 2005). Efficiency is defined as the ratio of a firm's output to that of its input and is measured in terms of the maximum feasible output which can be obtained with a given set of inputs (Liebermann & Dhawan, 2005).…”

“…Such difference in impact is attributed to the efficiency with which a firm is able to convert its resources into "valuable" "difficult to imitate" capabilities and into financial performance (Liebermann & Dhawan, 2005). Efficiency is defined as the ratio of a firm's output to that of its input and is measured in terms of the maximum feasible output which can be obtained with a given set of inputs (Liebermann & Dhawan, 2005). In this study, we specifically study the relationship in two contexts: high vs. low efficient firms in making this transformation.…”

Technical Efficiency in Transport Manufacturing Firms: Evidence From Malaysia

“…Several empirical studies in other countries (Pitt & Lee, 1981;Lieberman & Dhawan 2005;Radam, Abu, & Abdullah, 2008) used firms' data by using the firms' data on budget, and then determine the efficiency of variables of specific firms (including management experience, characteristics ownership, etc.) in an effort to identify some of the factors contributing to the efficiency differences between firms within the industry.…”

How to measure company productivity using value-added: A focus on Pohang Steel (POSCO)

“…Nevertheless, we show that the data in corporate financial statements can often be adapted to yield estimates of a company's productivity and its change over time. Drawing from such data, a growing number of productivity comparisons at the firm level have begun to emerge (e.g., Brynjolfsson & Hitt, 2003;Lieberman & Dhawan, 2005;Oum & Yu, 1998;Schefczyk, 1993).…”