Abstract for: Effects of Aging Resources on Firm and Industry Dynamics
Mainstream strategy scholars have long recognized the importance of stocks (“resources”) in explaining firm growth and performance. Under the label of the Resource Based View (RBV) of strategy, strategy researchers have been consumed with several questions about stock accumulation. Surprisingly, the literature has done little to evaluate how the value (not just the amount) of these accumulated stocks rise or fall endogenously over time. In this paper, we show how the simple aging chain model provides a general structure that can extend and strengthen the RBV by organizing existing system dynamics insights about resource aging and by teasing out unexplored implications of resource aging for firm and industry dynamics.