Abstract
PurposeThe purpose of this paper is to investigate the relative contribution of tangible resource (TR) and intangible resource (IR), and capabilities on firm performance based on the measures of market share, sales turnover and profitability.Design/methodology/approachA cross-sectional survey research design was used in the study. The modified version of Galbreath and Galvin’s (2008) resource-performance questionnaire which included a total number of 45 questions was applied on 243 Turkish firms operating in different industries. The data collected were analysed by hierarchical regression analysis.FindingsThe findings revealed that IRs and capabilities contributed more greatly to firm performance compared to TRs. However, in contrast to the proposition of resource-based theory that views capabilities as the most important skills that underpin the development and deployment of both TR and IR, capabilities offered rather limited additional explanatory power to the prediction of firm performance only with respect to profitability against the combined effects of TR and IR.Originality/valueThe vast majority of the empirical resource-based view (RBV) research concentrates on developed countries and very little is known about results outside of this domain. This study employs Turkish business databases to assess the relative importance of TR and IR and capabilities on performance differences among firms in Turkey which was the 17th largest economy in the world trade in 2016. Second, in the RBV literature, limited research tests the contribution of capabilities to firm success after simultaneously accounting for the effects of other resources (namely, TR and IR) available to the firm. Finally, this research offers practical contributions to executives and managers who have to make adequate decisions for firm survival and growth in the competitive business arena.
Highlights
Strategy researchers (Ambrosini and Bowman, 2009; Kor and Mesko, 2013; Molloy and Barney, 2015) have suggested that intangible resources (IRs) were considered as the most likely sources of firm success because they are not acquired and replicated in factor markets
This study aims to make potential contributions to resource-based view (RBV) in three main areas: first, the vast majority of the empirical RBV research concentrates on developed countries and very little is known about results outside of this domain (Cavusgil et al, 2013)
In testing the H1, the relative contribution of IRs was significantly higher than tangible resource (TR), the difference was not considerable and TRs were still significantly associated with all performance measures and offered unique contributions to firm performance
Summary
Strategy researchers (Ambrosini and Bowman, 2009; Kor and Mesko, 2013; Molloy and Barney, 2015) have suggested that intangible resources (IRs) were considered as the most likely sources of firm success because they are not acquired and replicated in factor markets. Since firms are bundles of IR and tangible resource (TR), it is very unlikely for a firm to compete on the basis of a single IR, important as it may be (Sirmon et al, 2011; Kor and Mesko, 2013). Published in the European Journal of Management and Business Economics. The full terms of this licence may be seen at http://creative commons.org/licences/by/4.0/legalcode
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