Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition

Modern Resource-Based Theory(ies)

“…Although part of the marketing effort of the RBV has been to point to its roots in Edith Penrose's thinking on firm growth (Penrose, 1959;Kor & Mahoney, 2000), the RBV does not get established in the strategy field until the seminal contributions by Lippman and Rumelt (1982), Wernerfelt (1984), Rumelt (1984) and Barney (1986). As already mentioned, resourcebased scholars have relied heavily on fundamental insights and theories of various fields and branches in economics, such as the economic theory of the entrepreneur (Barney, 1986;Knight, 1921;Rumelt, 1987); efficient markets theory (Barney, 1986;Fama, 1970); theories of input heterogeneity and its consequences for firm growth (Penrose, 1959;Wernerfelt, 1984); property rights economics (Coase, 1960;Teece, 1986;Kim & Mahoney, 2005;; the theory of competitive equilibrium (Debreu, 1959;Lippman & Rumelt, 1982); and, arguably, particularly Chicago-UCLA industrial organization economics (Demsetz, 1973(Demsetz, , 1974Peltzman, 1977;Crawford & Alchian, 1978). Thus, the base of economics from which the RBV has drawn nourishment is one of applied micro-economics and efficient markets theory.…”

“…Rather, the interconnectedness of asset stocks and causal ambiguity appear to be necessary to explain long-term differences in resource stocks (Lippman & Rumelt 1982;Barney 1991). The interconnectedness of asset stocks relate to complementarities among two or more resources (Stieglitz & Heine 2007).…”

“…RBV scholars sometimes explain this as a simple intellectual division of labor, the positioning approach handling product imperfections (e.g., Porter, 1980), the RBV handling factor market imperfections (e.g., Barney, 1991). Accordingly, product markets are often treated as perfectly competitive in the RBV (e.g., Lippman & Rumelt, 1982;Peteraf, 1993). However, it seems fundamentally odd for reasons of basic symmetry to invoke highly imperfect factor markets and perfect products at the same time, particularly given that one firm's product market is another firm's factor market (Foss & Hallberg, 2010).…”

“…Later currents in industrial organization, such as contestable markets theory (Baumol, Panzar & Willig, 1982), game theoretical new industrial organization (Tirole, 1989), and the Chicago-UCLA approach (Demsetz, 1973) have also had enormous influence on strategic management. More specifically, contestable markets theory and new industrial organization have dominated the commitment approach (Ghemawat, 1991), and the Chicago-UCLA approach to industrial organization as well as ideas from Penrose (1959) and Schumpeter (1911) have motivated the resource-based view (Lippman & Rumelt, 1982;Rumelt, 1984;Barney, 1986Barney, , 1991Peteraf, 1993;Foss, 2000)-the key focus of the present chapter.…”

“…On the one hand, it revitalized the concern with firm heterogeneity, innovation, and dynamics associated with such heterodox economists as Thorstein Veblen (Foss, 1998), Joseph Schumpeter (1911), Edith Penrose (1959), and George Richardson (1972) (Jacobsson, 1992). On the other hand, what is perhaps the RBV core model (Demsetz, 1973;Lippman & Rumelt, 1982;Barney, 1986Barney, , 1991Peteraf, 1993;Peteraf & Barney, 2003) is essentially a competitive equilibrium model with (at least one) heterogeneous firms. This tension has been manifest in the RBV from its inception in the beginning of the 1980s, and has led commentators to speak of "Demsetzian" and "Penrosian" (Foss, 2000) or "high-church" and "low-church" versions of the RBV (Gavetti and Levinthal, 2004) (cf.…”