We compare resource-based and relational perspectives to examine competitive advantages within the context of vertical learning alliances. Previous research has shown that through such alliances suppliers acquire knowledge to forge new capabilities and attain performance improvements. We ask whether such improvements are exclusive to the learning partnership, or are available in other average partnerships of this supplier. We posit that the extent to which such performance improvements are partnership exclusive depends on whether the newly forged capabilities lie entirely within the supplier firm's boundaries, or at the learning dyad level. As such, we untie two forms of performance improvements arising from learning dyads. While the resource-based view helps explain the performance gains learning suppliers deploy across average partners, the relational view reveals the additional performance edge that remains exclusive to the learning partnership. Based on empirical evidence from a survey of 253 suppliers to the equipment industry, we find that partnership exclusive performance (i.e., 'relational performance'), the true source of learning dyads' competitive advantage, is a function of suppliers acquiring know-how within the dyad, developing dyad-specific assets and capabilities, and structuring buyer-supplier relational governance mechanisms. We discuss implications for research and practice.

business is business! And business must grow –Dr. Seuss, The Lorax The paper investigates the agency argument that sales growth in firms with free cash flow (and without strong governance) is less profitable than sales growth for firms without free cash flow. It also tests whether strong governance conditions improve the performance of firms with free cash flow and/or limit the investments in unprofitable sales growth. Consistent with agency theory, firms with free cash flow gain less from sales growth than firms without free cash flow. But different governance conditions affect sales growth and performance in different ways. Having substantial management stock ownership mitigates the influence of free cash flow on performance, despite allowing higher sales growth. In contrast, outside blocks held by mutual funds reduce sales growth substantially, but does not increase performance from sales growth. Copyright © 2000 John Wiley & Sons, Ltd.

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The paper investigates the contingencies which define valuable resources in professional medical services. We identify activities with credence, experience, and search qualities in medical service industries in general, and in veterinary practices more specifically. We propose that different capabilities are needed to deliver different services and test whether the contingent combination of capabilities for particular services is linked to the performance of veterinary practices. For example, we expect that practice capabilities which help to retain clients are necessary for the successful delivery of services with experience qualities. We find evidence of performance benefits of client retention in a sample of 193 veterinary practices. We also find that in markets where competition from a new form of entrant is especially intense, an independent veterinarian's credence activities combine with its experience and search activities to jointly improve practice profitability. Since the new entrants' resources are mainly effective in the delivery of services with search qualities, the practice capabilities of the independent veterinarians that allow them to offer services with credence and experience qualities can be seen as a type of isolating mechanism.

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