Empirical Research in the RBV

11 July 2007 at 12:07 am 20 comments

| Peter Klein |

Empirical work in transaction cost economics has been examined in several detailed reviews. Joskow (1988), Shelanski and Klein (1995), Klein (2005), and Macher and Richman (2006) are sympathetic to TCE while David and Han (2004) and Carter and Hodgson (2006) find the evidence less convincing. The critics of TCE raise some good points but do not, in my judgment, show that any rival theory has greater explanatory power. How about the resource-based view?

Surprisingly, while the RBV is central to much recent empirical work in strategy and organization, its empirical track record has not been scrutinized systematically as has TCE’s. Strategic Organization published a paper last year, “Tests of the Resource-Based View: Do the Empirics Have Any Clothes?” by Richard Arend, that begins to fill this gap.

Arend reviews 60 empirical RBV papers and finds the overall picture disappointing:

In this essay, I outline four explicit tenets of the RBV, translate them into a set of criteria that a test of the RBV would need to meet and then assess the extent to which the most cited recent empirical support of the RBV meets these criteria.

My conclusion is that there are no satisfactory empirical tests of the RBV. No paper or collection of related papers measures the benefits specified by RBV theory; adjusts for the costs of the resources; provides evidence that resources meet the RBV criteria; and controls for the influence of higher-level resources. Moreover, the adequacy of testing has not improved over the last 10 years. If empirical testing does not alter its approach, the RBV will be in increasing jeopardy.

Some of Arend’s complaints: (1) resources that meet the VRIO criteria are usually identified only ex post, making the explanation circular; (2) many of the papers use RBV as a framing device without testing any specific implications of the theory; (3) the link between resources and performance is not carefully examined; (4) key resources are hard to measure; and (5) the gains from superior resources may not be captured at the firm level, in which case firm performance cannot be the dependent variable.

What do readers think?

Entry filed under: - Klein -, Management Theory, Strategic Management, Theory of the Firm.

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20 Comments Add your own

  • 1. Joseph Mahoney  |  11 July 2007 at 1:28 pm

    Arend’s (2006) article defines the “resource-based view” narrowly, based on Valuable, Rare, Inimimitable, Non-substitutable resources that are effectively Organized.
    As Nicolai Foss noted over a decade ago, the UCLA (Barney, Rumelt) branch is not the ONLY word on RBV. There is also the Penrosean branch (Penrose, 1959, Teece, JEBO, 1982) on the direction of diversification and the growth rate of the firm, and the capabilities branch (Teece, Pisano and Shuen, 1997), in which a large number of empirical papers can be identified here as well.

    Clearly the RBV — more broadly defined (as it was by Mahoney and Pandian, 1992) and later by Helfat and Peteraf (SMJ) — is in need of a Shelanski and Klein type paper, which was done for TCE!

  • 2. jc  |  12 July 2007 at 11:37 am

    It would be interesting to hear our colleagues’ views on whether Penrose should properly be regarded as the God-Mother of the RBV, and, if so, how such a claim can be justified from our literature.

    As I read Penrose’s work, there are fundamental disjunctions between the axioms underpinning her analysis and those seemingly present in the RBV. I say seemingly because beyond Barney’s 10-year look-astern to how the RBV thing changed as it gathered steam, I have yet to read any compelling examination of the RBV’s axiomatic underpinnings.

    My assumption is that were these clarified, it would become obvious that the Wernerfelt (1984) citations to Penrose (1959) were exceedingly casual. Indeed I might argue that Wernerfelt might have better referenced Adam Smith and his model of the firms as emerging as the factors of production are combined – a theme taken up in Rob Grant’s work. I believe Penrose is suggesting something very different.

    One significant difference, of course, lies in our proposing that the crucial resources that combine into ‘the firm’ are all obtained from the market, so proposing an exogenously driven theory of the firm (and its growth) or whether some resources are inherently internal, so suggesting an endogenous theory – as pursued by Romer and others (e.g. Aghion & Howitt 1998). The difficulty with the first was well captured in Barney’s 1986 piece on ‘strategic factor markets’. The difficulty with the latter is well known, given the relative failure of Romer’s program.

    This difference has been explored over the centuries in discussions about whether ‘entrepreneurship’ is a factor of production. Appeals to this or some other kind of ‘magic dust’ resource, such as ‘dynamic capabilities’ merely begs the question of where these come from and at what price – and this is probably no more than two steps into an infinite regression into our failure to grasp the essences of the human condition.

    In short I see the RBV has been transformed into a classic Popperian ‘ad hoc’ attempt to save neo-classical thinking from the deeply subversive provocations of Penrose, whose real agenda I see as brilliantly hidden, and the rather similarly agenda-ed work of Shackle and Lachmann.

    Whatever original impulse behind the RBV, the current outcome seems to me to be an opportunity wasted. Whether it appears so to others is another matter. But to blame it on Edith is surely to add insult to injury.

  • 3. Peter Klein  |  12 July 2007 at 3:06 pm

    I reviewed a nice paper for the upcoming AoM conference that goes through the RBV’s foundations and offers a comprehensive synthesis and critique. I only now realized this is one of JC’s papers:

    Kraaijenbrink, Spender, and Groen, “From Resources to Imagination: New Directions for a Theory of the Firm” (January 2007). I urge everybody to check it out.

  • 4. jc  |  12 July 2007 at 4:37 pm

    Hey, Peter, that’s very nice of you. Jeroen, who is an extremely interesting chap, is the primary author. I’m riding on his skateboard.

  • 5. john mathews  |  28 July 2007 at 4:44 am

    Yes, the RBV, and the role played by Penrose. I agree with jc that the reference from Wernerfelt to Penrose in 1984 was casual, in that what Wernerfelt was doing was to frame a discussion of resources that emulated Porter’s discussion of ‘competitive forces’ — so that he was arguing that a firm needs to be aware not just of the market position of competitors, but also of the resources brought by competitors to the market fray. This was a pretty straight-forward complement to the Porter approach, but it seems to have died with Wernerfelt’s article, because I haven’t seen many other references to the duality between the firm’s resources and activities in the literature since then.

    To take jc’s point further regarding Penrose, it has always seemed to me that the central weakness in Barney’s approach (or the equilibrium-based UCLA approach) is that it never seems to differentiate between resources taken individually and resources taken as a group. Barney’s VRIO criteria are always proposed as being applied by a firm to resources taken one at a time. (This is certainly how he presented his case at the Copenhagen conference on strategic management in 2006, in his nice example of Nicolai”s coffee shop.) Yet it is surely axiomatic that what Penrose had in mind is the collection of resources, taken as a whole, as giving distinctiveness to the firm. This is really the only perspective to make sense in the RBV; the firm will evaluate resources according to howwell they fit with the current resource mix, or future expected resource mix — not with how they may be evaluated individually.

    If we concede, with Penrose, that the firm’s resource aggregate lies at the core of the RBV, then we have the possibility of posing a strategic goal for firms in terms of their hunt for resources. That goal is to find resource complementarities, or synergies. Thus a telco with a mobile coverage spanning one city will certainly wish to acquire resources needed to cover another city, and will pay accordingly — whereas a telco without such mobile coverage will not really be interested in such an acquisition. Or a media company with newspapers and magazines will certainly be interested in a webpage to complement them, and will value such a resource highly (as Murdoch did in the case of his acquisition of MySpace).

    Are jc and I the only ones who know — really know — how badly Penrose is represented in the current approaches to the RBV?

  • 6. JC  |  28 July 2007 at 10:02 am

    Excellent point, John, on the individual versus collective issue – after all Penrose refers (TGF p.25) to the way ‘resources’ can be defined independently of their use while ‘the services they provide’ cannot – and ‘it is largely in this distinction that we find the source of the uniqueness of each individual firm’.

    And if that uniqueness isn’t what the RBV is trying to comprehend and explain, rather than assume, while ignoring the Penrosian distinction between resources and services, then I have completely missed their point.

    As for the other members of the ‘Penrose has nothing to do with the RBV club’, there are several who have written extensively on the matter – including our very own Nicolai, along with Richard Langlois, Brian Loasby, Christos Pitelis, and no doubt several others whose names escape me at this moment.

    We need to appreciate that the ‘Penrose as the RBV’s God-Mother’ argument is one of our community’s ‘urban myths’. It persists for a very specific reason – which is that there is no viable theory of the firm in the RBV literature since, as John comment makes clear, there is no theory of resource combination.

    Absent a theory of the firm, the RBV folks need to allude to Penrose in order to establish that they are talking about firms rather than markets – which is, of course what their literature is actually about.

    Thus the irony is that Jay’s ‘strategic factor market’ argument does actually contain the kernel of a theory of the firm as something which cannot be comprehended in terms of markets and their behavior. Alternatively I would say that we should read Jay’s paper as the beginning of an interesting and possibly novel argument that firms are inevitably associated with market failure, and that if we really understood real markets we might get closer to understanding real firms.

    First and foremost, of course, the neo-classical notion of the market is one that cannot fail, by definition, since it is given irresistible power – market forces rule. We can only have a theory of the firm under the conceptual conditions in which our assumptions about markets allows for their failure.

    So the RBV’s original but now lost promise was that it looked at resources, rather than politics, irrationality, or information asymmetry as the most theorietically interesting source of market failure, and thus of the firm itself.

    Marshall’s conjectures about ‘industrial regions’, for instance, and the theory of their existence growing out of the ‘pooling of resources’ is one such argument.

    At bottom it is about understanding that you cannot have a theory of the firm unless the nature or limitedness of the resources necessary were not in some way capable of precipitating market failures. The firm is then an economic response – in the political economy sense – to that circumstance.

    This again is the suggestion that the theory of the firm can only grow out of the non-abstractness of the resources which it consumes (and provides as goods and services). The firm is a empirical term, a concept that can only refer to a world established and comprehended empircally. It cannot be a viable concept in an abstract world established axiomatically – especially from axioms such as perfect markets and perfect rationality in the allocation of perfectly movable, non-degrading assets.

    And this, of course, defines the firm into the German Historical side of the Methodenstreit – there we go again! – rather than into the Mengerian, Walrasian, Friedmanesque side.

    But who in our field cares when mathematical models are the intellectual products that get the rewards/awards?

  • 7. John Mathews  |  28 July 2007 at 10:30 pm

    ‘And this, of course, defines the firm into the German Historical side of the Methodenstreit – there we go again! – rather than into the Mengerian, Walrasian, Friedmanesque side.’

    Of course the firm (and its theory thereof) has to be on the German historical side of the Methodenstreit, and not only because Schmoller is the father of the business case study (transmitted from Germany to the fledgling HBS). It is because the firm is above all an institution and one that evolved for purposes of pooling investments, or as we would now say, resources. I thoroughly agree that our starting point in strategy should be a theory of the firm as an aggregate of resources, endowed with some strategic intent – such as capturing complementarities (or synergies) between the resources so deployed. The way is then clear to Lachmann and an Austrian account of capital structure and its susceptibility to endless entrepreneurial revision and correction, in an endless quest for profit in conditions of disequilibrium.

    But I take issue with JC in linking Menger with Walras, Friedman et al. Here a reading of Mirowski and the origins of neoclassical economics as an impure reinterpretation of mid-19th century energetics, is indispensable. Mirowski informs us that Jevons and Pareto and above all the American Irving Fisher were all in their own way translating the concepts of energy as developed in mid-19th century thermodynamics into economic equivalents (energy = utility; prices as a vector force field etc). Walras falls somewhere in between, hitting on a convenient set of equations but never really comprehending his debt to the physics of energy. But Menger stands outside this discourse, and so too does the entire Austrian tradition, which never has to engage with neoclassical abstractions like ‘utility’ because it has a direct and immediate interpretation of the forces making for exchange. It does not have to impose equilibrium as the over-arching goal of the system because it does not start from thermodynamic conservation principles. And it is comfortable with notions of disequilibrium and ‘market process’ because it is not concerned with a unique ‘solution’ to the arbitrary field equations established as a representation (and abstraction) of the economic system.

    I find Mirowski to be an infallible guide to all this except in one very important sense. He sees the ‘solution’ to the dilemma posed by understanding the extraordinarily contrived and non-realistic origins of neoclassical economics as lying in taking the field in the direction of a new institutionalism. He seems to regard Austrian economics as a non-starter, and he certainly has never heard of ‘strategy’ – if you take game theory out of the picture. But we don’t have to follow Mirowski to this nether-world of institutionalism. We can comprehend Austrian economics, with its strong subjectivist overtones, as constituting ‘proto-strategy’ – in the sense that it is concerned with choices and their outcomes rather than with objective descriptions of economic events. And we can take the absence of a theory of the firm in Austrian economics as an open invitation to create one, and moreover one that is consistent with the field’s framing itself in disequilibrium and capital-structure terms. Here surely is a rich foundation for a truly ‘strategic’ resource-based view, rather than the Ricardian and rents-based market failure accounts bequeathed us by the UCLA school.

  • 8. JC  |  28 July 2007 at 11:11 pm

    This is excellent, thanks. Clearly I have to spend more time with Menger and Mirowski.

    But I hope we make our principal point, that to seek a theory of the firm in an equilibrium grounded system is to adopt axioms and assumptions that prevent one finding what one is looking for.

    ‘Where next?’ becomes a useful question. The firm, as John argues, is at bottom a social institution and in the sense developed by John Commons and Douglass North, a reflection of the non-equilibrium situation it inhabits.

    Thus the theory has to begin with intellectualizing that environment. Only then can one move on to theorizing the firm as a response. And that, in turn, requires one to identify who or what is doing that responding. Is the economy a collective response, in the North sense, or an individual response as many, such as the methodological individualists, might argue?

    It would be interesting to tease out Penrose’s implicit (or explicit) sense of her firm’s environment.

  • 9. Peter Klein  |  28 July 2007 at 11:59 pm

    John is referring, I assume, to Mirowski’s 1994 book _More Heat than Light_. I did a short review of his earlier book _Against Mechanism_ which you can find here:

    http://web.missouri.edu/~kleinp/papers/mirowski.pdf

    I would add just a short note to this fascinating discussion that we needn’t choose Schmoller over Menger to get from resources to the firm. Menger had a sophisticated understanding of institutions, both what we now call the institutional environment and what we now call institutional arrangements. (Menger called the former “orders” and the latter “organizations”; Hayek preferred “cosmos” and “taxis.”) Menger didn’t develop a theory of the firm per se but did recognize the role of the entrepreneur as a coordinating agent whose function is to organize combinations of resources to realize his vision. Nicolai and I included this footnote in our “Gains from Trade” paper:

    Carl Menger’s (1871) treatment of production gives the entrepreneur a similar [resource-owning] role. Production requires an “act of will” and “supervision of the execution of the production plan.” These functions “entail property ownership and, therefore, mark the Mengerian entrepreneur as a capitalist–entrepreneur” (Salerno, 1998: 30). Menger describes “command of the services of capital” as a “necessary prerequisite” for economic activity. Even in large firms, although he may employ “several helpers,” the entrepreneur himself continues to bear uncertainty, perform economic calculation, and supervise production, even if these functions “are ultimately confined . . . to determining the allocation of portions of wealth to particular productive purposes only by general categories, and to selection and control of persons” (Menger, 1871: 160–61).

  • 10. JC  |  29 July 2007 at 8:52 am

    I am reminded of Sidney Pollard’s discoveries that the entrepreneurs of the early Industrial Revolution period in England bore the financial risks but ‘delegated’ the supervision of production to their ‘foremen’.

    Two points. These foremen both made more money than the entrepreneurs, and had more secure incomes – taking salaries and wages rather than having to depend on profits (when they arose).

    Second, these foremen, or rather their American cousins, were the principal target of Frederick Taylor’s organizational reforms. Fred wanted the entrepreneur’s adoption of Scientific Management to destroy the foreman’s power-base – which he saw as typically arbitrary and capricious.

    The implication is that the foreman’s power over the entrepreneur, translatable into revenue, was based on knowledge differentials, the differences, perhaps between resources and the services they provide.

  • 11. John Mathews  |  29 July 2007 at 8:58 pm

    Peter, yes, I am certainly referring to Mirowski’s More Heat than Light (1989 actually). And your review of his earlier book of essays, Against mechanism, was certainly prescient.

    Here is another useful review by David Gordon of Mirowski’s 1989 book. I suggest this book should be the starting point for all critiques of neoclassical economics:
    http://www.nd.edu/~pmirowsk/pdf/Review_by_Mises_Institute.pdf

    Let us recap the critique. If neoclassical economics is essentially a transference of the field equations of mid-19th century energetics, then no wonder that it has remained so impervious to critiques about the ‘reality’ of utility, and impervious to critiques about the lack of realism of the psychological assumptions of neoclassical consumption theory — because there is no psychological grounding to any of it, nor indeed any assumption of individual behaviour. It is simply a set of field equations transposed from one application to another. This is why I have never found much traction in the Methodenstreit disputes, because there is no grounding to the ‘individualism’ trumpeted as his watchword by Schumpeter and many others. There never has been an individual consumer modelled in neoclassical consumption theory, merely a cypher of a field theory and conservation principle.

    But moving on to strategy, the fact that Austrian economics remains immune to the Mirowski critique, and has opened up a whole field of non-mathematical and non-mechanistic inquiry into market process, capital structure, business cycles and disequilibrium generally, surely provides us with an avenue for development of a strategic theory of the firm in a disequilibrium economy. By ‘strategic’ I have in mind a theory that has no foundations in the equilibrium assumptions of neoclassical economics. I recognize that many are the followers of the Austrian school, of Von Mises and all the rest, but the point here is to focus on what an ‘Austrian’ theory of the firm might look like, and to move on to develop it. This should be our own niche within Austrian economics. Call it Austrian strategy if you like — following Jacobson (AMR 1992). The point is that the ‘subjectivism’ of the Austrian approach, which looks so quaint when decked out as economic discourse, is central and fundamental to any discourse of strategy worthy of the name.

  • 12. spostrel  |  29 July 2007 at 10:19 pm

    As I will be revisiting UCLA this coming year, perhaps I should speak up. Normally, I try to avoid the sort of exegesis exhibited in this thread, because I’m more interested in the validity of ideas than their pedigree. But I don’t think there’s much evidence that Rumelt has now, or ever, subscribed to the VRIO version of RBV.

    In fact, I’m not sure it’s correct to say he subscribes to the RBV in any form. He believes in uncertain imitability, to be sure, but his analysis of sustainability focuses on isolating mechanisms in general. His recent work with Lippman on the payments perspective expresses considerable skepticism about RBV concepts, and indeed about the application of neoclassical price theory to strategy problems and resource valuation.

    The idea of a UCLA “school” is kind of funny, actually. A more individualistic and argumentative group is hard to imagine, especially during the formative period of the RBV. These individuals could disagree with themselves, let alone each other. Rumelt was actually the first person to convey to me the saying “If two professors agree, one of them is redundant.” That attitude was liberating, though perhaps uncongenial for those yearning to join a movememt.

  • 13. JC  |  29 July 2007 at 11:07 pm

    right on John – which takes us back to Child (1972) and his ‘strategic choices’, and the Learned, Christensen, Andrews & Guth (1965) notions of strategy – and thence to Commons.

    Incidentally, on the case study method which Gay, as an ex- student of Schmoller’s, introduced to HBS, he would not have gotten away with this had the case method not already been legitimated in the Harvard Law School by Langdell in the 1870s:

    Cruikshank, J. L. (1987). Delicate Experiment: The Harvard Business School 1908-1945 Boston MA, Harvard Business School Press (p.74)

  • 14. JC  |  29 July 2007 at 11:08 pm

    Steve,

    It would be interesting to find out what the Anderson School’s sense of the history of the RBV is … and who really contributed to its evolution.

  • 15. David Hoopes  |  31 July 2007 at 12:04 pm

    Steve is correct. Rumelt has never been a proponent of the RBV per se. Certainly, he has never subscribed to VRIO. Please refer to his 1984 book chapter in Lamb, “The Strategic Theory of the Firm.” Dick was more interested in the question, “How do firms differ?” Again as Steve pointed out, Dick’s more recent concerns are pretty well spelled out in his two 2003 SMJ pieces with Steve Lippman.

    If there was a UCLA way of thinking, it was combining this RBV approach with organizational economics a la Demsetz, Klein, and the Barney and Ouchi reader. Think Hesterly, Liebeskind, and Zenger. But, really students and faculty were encouraged to go their own way. There was not an accepted approach everyone was expected to take.

    Ouchi, Lieberman, and McKelvey didn’t think much of the RBV. There’s a reason Jay didn’t get tenure there.

  • 16. John Mathews  |  1 August 2007 at 2:34 am

    Although I mentioned the ‘UCLA School’ only parenthetically, this is what has attracted attention in subsequent posts by Steve and now by David. So be it – this is the delight of these online discussions.

    Let me then defend my nomination of the ‘UCLA School’ against the challenges posed by Steve and David.

    First, what do we mean by a ‘School’? Of course we have all heard of the ‘Harvard School’ and the ‘Chicago School’ and their dispute over the terms of industrial organization and policy. By the ‘Harvard School’ most people have in mind a ‘structure-conduct-performance’ approach to industrial organization, emphasizing that few market participants must mean high barriers to entry and curtailed competition – as argued by Richard Caves in particular, and before him by Joe Bain, Edward Mason, and afterwards by Michael Porter (with Porter inverting the argument, to make it a foundation for strategy). It is also known as a ‘structural theory of market performance’ that emphasizes technological issues in determining entry and barriers to entry – such as economies of scale.

    The contrast is of course with a ‘Chicago School’ where the emphasis is less on the number of competitors and more on their efficiency. The basic argument might be phrased that ‘market evolution reflects differential efficiency’. (See e.g. Richard Gilbert, The role of potential competition in industrial organization’, JEP, 3(3): 107-127). Harold Demsetz argued that there might be few firms in an industry not because of high barriers to entry but because of superior efficiency. If George Stigler is added in, then we have a ‘Chicago School’ of industrial efficiency. Stigler (1968) defined an entry barrier as “a cost of producing (at some or every rate of output) which must be borne by firms seeking to enter an industry but is not borne by firms already in the industry” (1968, p. 67).

    Now there were certainly overlaps between these authors (Bain has much in common with Demsetz, for example) and there were certainly disagreements between the principal protagonists. Demsetz repeatedly disagreed with Stigler, for example. So people clearly recognize the existence of ‘Schools’ even when the parties disagree, with each other and with outsiders. Unanimity is not a condition of appellation as a school – so long as there are some points of agreement. This seems to take care of Steve’s challenge.

    What then of the substance of a School to be termed the ‘UCLA School’ of resource-based competition or resource-based view of strategy. Firstly, there must be more than one protagonist – and Jay Barney (when he was at UCLA, 1980-1986) and Dick Rumelt would constitute a quorum. Secondly, they must have something in common. In this case, one could say – more or less — that they share the following views:
    1) Strategic differences between firms can be attributed to differences in resource endowments or usages;
    2) These resource endowments can be characterized in terms of creating barriers to entry (uncertain imitability) or uniqueness (VRIO);
    3) The resource endowments with these characteristics can generate Ricardian rents at equilibrium for the firm that has them.

    Thirdly, there must be other people who buy into these kinds of arguments. There are plenty who do so – Peteraf, Amit, Schoemaker et al et al. They all refer routinely to Barney (in writings sourced from UCLA) and/or Rumelt.

    Here, I submit, we have the elements of a ‘School’.

    All we need is a contrasting view. Let us suppose that there exists an alternative to this ‘UCLA school’ which instead of emphasizing comparative static arguments and the earning of Ricardian rents based on resource barriers, it argues instead (following Penrose) that firms are bundles of resources and it is the complementarities between these resources that account for firm differences, such as profitability and growth rates. Instead of focusing on resources as barriers it would view resources as a means of explaining how firms build entrepreneurial business models and thereby challenge incumbents. Instead of focusing on the earning of Ricardian rents it would focus on how entrepreneurs build sustainable and distinctive resource bundles to underpin their strategic choices of revenue-earning activities. This would be a Penrosean, dynamic, and evolutionary approach to an account of strategy based on resources, rather than a comparative static, equilibrium-based and rents-earning perspective. The Penrosean approach could be linked to Austrian insights, including capital structure theory, market process ideas and Schumpeterian disequilibrium, as well as other sources of distinctiveness including transaction arrangements, governance and property rights. But it is hard to link the proponents of the ‘UCLA School’ with any of these ideas.

    To be provocative, let us give this ‘alternative to UCLA School’ a name. Let’s call it the ‘Copenhagen School’!

    In a word, the UCLA School is Ricardian, while the ‘Copenhagen School’ is Penrosean.

  • 17. ln  |  1 August 2007 at 9:30 am

    Dear Prof. Mathews.

    I actually read your book, and found the idea of linking activies to the revenue sheet and resources to the balance sheet intriguing. Yet your final paragraph shows the problems with the “school”-concept:
    “The Copenhagen school” is taken already by Arne Rasmussen, Max Kjær-Hansen, Hans Brems, Otto Ottesen and other great scholars. Rasmussens book was published in 1955, that is four years before Penrose’s book. The Copenhagen school is certainly no alternative to equilibrium economics, rather what distinguises this approach to marketing and strategic management is its firm foundation in a microeconomic modelling approach.

    By now it is mainly historical, but actually quite interesting as such.

  • 18. David Hoopes  |  1 August 2007 at 11:52 am

    Whew!

  • 19. Awie Foong  |  2 August 2007 at 2:47 am

    it would be nice to have a review of the assumptions that underlied all the different schools of thoughts be it classical, RBV, or KBV of firms, and a unifying framework that integrates rather than contradicts the differences.
    or is there one already??

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