Strategic factor markets: expectations, luck, and business strategy
Management Science
Asset stock accumulation and sustainability of competitive advantage
Management Science
Adaptation on rugged landscapes
Management Science
Imitation of Complex Strategies
Management Science
The Entrepreneurial M-Form: Strategic Integration in Global Media Firms
Organization Science
Overcoming Local Search Through Alliances and Mobility
Management Science
Random Walks and Sustained Competitive Advantage
Management Science
Pre-Entry Knowledge, Learning, and the Survival of New Firms
Organization Science
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In this research, we examine the dynamic capability of resource allocation to invest in operational capabilities. Using a computer simulation, we model a process of firms competing in factor markets for opportunities to invest in existing capabilities and acquire new ones. Based on the simulation results, we derive a set of propositions about the conditions under which there are and are not performance benefits from possessing a superior ability to search for new capabilities. Because the definition of what constitutes a new capability is based on a firm's preexisting capabilities, we also incorporate differences in initial endowments into the analysis. We find that endowment and search ability both matter, and that in many circumstances, the effects of possessing a superior endowment dominate the effects of superior search ability.