An Assessment of Resource-Based Theorizing on Firm Growth and Suggestions for the Future

Abstract

Together, Penrosean and Barnean resource-based logic make up the dominant theoretical approach to understanding firm growth. While extant literature focuses on a common lineage between Penrosean theory and the resource-based view (RBV), we explicate divergence at these origins of resource-based theorizing and subject the growth implications of each to meta-analytic testing. RBV’s central tenets concern resources that meet valuable, rare, inimitable, and nonsubstitutable (VRIN) criteria, while Penrose’s theory discusses the versatility of resources. Theoretically, VRIN resources allow firms to exploit unique opportunities, while versatile resources allow firms to recombine resources in novel ways to create growth. Using meta-analytic techniques, we find that versatile resources are associated with higher levels of growth, whereas VRIN resources are not. We offer novel insights into alternative characteristics of resources derived from the same conceptualization of the firm, add greater specificity to the performance construct, and open up avenues for new theorizing on firm growth that is more closely aligned with Penrose’s theory.

Fostering growth through business development: Core activities and challenges for micro-firm entrepreneurs

“…Thus, it is interesting to note that although academic attention to the issue of business development is only emerging, business development has already been suggested more than fifty years ago as one of two notions of business growth. In a recent study, Nason and Wiklund (2015) confirm Penrose's (1959) conceptualization of versatile resources as resources that increase a firm's combinative possibilities and therefore are positively related to business growth.…”

“…The relevance of resources had also been hinted at in prior research on business development, as pointed out in our literature review above. In a meta-analytical study of the relationship between resources and financial performance and growth respectively, Nason and Wiklund (2015) find that the Penrosean characteristics related to resource versatility (in terms of the range of services they can provide)…”

“…The activities in the third category support these activities by facilitating the access to different kinds of resources through networking. Yet, the managing of resources as an important dimension of business development in relation to Penrose's work remains underexplored to date (Nason & Wiklund, 2015). Thus, our study departs from Kind and von Knyphausen-Aufsess' (2007) definition.…”

Productive opportunities, uncertainty, and science-based firm emergence

“…In particular, we build on and extend two areas of research: (1) resource-based studies of science-based firm emergence Wright et al 2004) and (2) entrepreneurship and the development of productive opportunities (McKelvey 2016;Nason and Wiklund 2015).…”

“…First, we suggest that by giving greater attention to entrepreneurship in science-based sectors, we can gain deeper insights into the relation between the development of productive opportunities and uncertainty. Penrose's work portrays technology resources as almost versatile or fungible (Nason and Wiklund 2015). Subsequent research from evolutionary economists suggests that knowledge is firm and industry-specific.…”