On the Origins of Competitive Advantage: Strategic Factor Markets and Heterogeneous Resource Complementarity

IESE Business School Working Paper No. 666

Academy of Management Review, Forthcoming

30 Pages Posted: 12 Oct 2006 Last revised: 1 Jun 2009

Date Written: September 1, 2007

Abstract

Strategic factor market theory suggests that in the absence of luck, asymmetric expectations are a necessary condition for firms to appropriate gains from valuable resources. I argue that this is only true in the absence of heterogeneous resource complementarity. Extending factor market theory, I show that firms can profit when they exhibit superior complementarity to target resources, even in the absence of asymmetric expectations, and I determine the components of appropriated value in such markets. I thus demonstrate the power and simplicity of coalitional analysis, while shedding light on central concepts in strategic management discourse.

Keywords: Strategic factor markets, value appropriation, resource-based view, bargaining perspective, cooperative game theory

Suggested Citation

Adegbesan, J. Adetunji, On the Origins of Competitive Advantage: Strategic Factor Markets and Heterogeneous Resource Complementarity (September 1, 2007). IESE Business School Working Paper No. 666, Academy of Management Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=936945 or http://dx.doi.org/10.2139/ssrn.936945

J. Adetunji Adegbesan (Contact Author)

Bridge Institute for Strategy & Society ( email )

71-75 Shelton Street
London, England WC2H 9JQ
United Kingdom