A Study of the Company's External Relationships: An Application of the Resource-Based Theory to the Brazilian Software Sector
15 Pages Posted: 18 Apr 2005
Date Written: March 29, 2005
Abstract
The Brazilian software sector presents significant variability among companies as refers to the profit margin and market share. Seeking to evaluate the causes of this variability, this paper presents an empirical test of evaluation of the correlation between the observed performance of companies and their external relationships with suppliers and customers. The theoretical basis of the argument is the RBV (Resource Based View) approach, according to which the principal cause of the variety of firms' performance in the market lies in the specific nature of their resources, since this specificity makes them, from the point of view of relationships, non substitutable, which is one of the main reasons for the differences in performance. The parameterization and quantification are based on the proposal of French economist Rodolphe Durand (1999), where the importance of external relationships in the competitive performance of companies is assessed through two latent variables: non-substitutability of suppliers and non-substitutability of customers. In the first we find a strong association with the market and market performance, whereas the association with the margin is negative. In the second we find a positive association both with the margin and with performance.
Keywords: Resource-Based View, external relationships, competitive performance, software sector
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