Corporate political resources and the resource-based view of the firm

Abstract

Several authors looking at firms operating in regulated markets or, more generally, attempting to influence public policies, argue that a critical aspect to consider is whether these firms possess specific political resources; i.e. a set of unique political assets and skills that might prepare these firms to participate in policy debates, face the rivalry of competing interest groups and shape policy decisions (Boddewyn, 1994;Dean and Brown, 1995).Similar to the resource-based view (RBV) of the firm, which holds that a firm's resources that are rare, inimitable, non-substitutable and valuable may result in sustained competitive advantage (Wernerfelt, 1984), it has thus been argued that firms, in many cases, should also develop political resources with similar attributes.Baron (2003) argues, for instance, that 'nonmarket assets, and the competencies that flow from them, can give a firm a nonmarket advantage.Distinctive competencies and firm-specific nonmarket assets generate value as a function of how costly it is for market and nonmarket rivals to replicate them ' (2003: 42).A similar proposition can be found, in different forms, in Dahan (2005), Keim and Baysinger (1988), Maijoor and Van Witteloostuijn (1996), Oliver and Holzinger (2008) or Wei (2006), suggesting that the RBV can be applied in a straightforward manner when it comes to studying corporate political resources.In this essay, I challenge this proposition and argue that important modifications to the original RBV analysis need to be considered to really develop a theory of political resources and why they matter for firms.Rare, inimitable and non-substitutable resources certainly exist in political environments; however, I show that these criteria are not necessary conditions for political resources to matter and that other criteria are in fact as important, or even more important, in political environments.In fact, building a theory of firm political resources probably needs to start with a good theoretical understanding of the specificities of political arenas rather than with an attempt to directly extrapolate from the RBV as used for economic arenas. 1 The first two sections that follow summarize the problems with a pure RBV view -and particularly its focus on hard-to-imitate resources 2 -for political arenas, both at the empirical and the theoretical level.The last section offers directions which, I think, could set future research on a more promising path.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 94 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.