Strategic Resources and Firm Performance: An Application of the Resource Based View

Abstract

Under the influence of the framework that defines the Resource Based View, the purpose of this paper is to examine the contribution of the strategic resources (intellectual capital) that create value for the firm. More specifically, we assess the effect of intellectual capital on operating, financial and stock market performance of the firms listed in the personal goods sector of Pakistan Stock Bourse, for the period of 2005 to 2014. The notion of intellectual capital is measured by intellectual capital efficiency, and the “value added intellectual coefficient” method proposed by Pulic (1998), which comprises of capital employed efficiency, human capital efficiency, and structural capital efficiency. The results depict that intellectual capital has a significant, positive effect on operating and financial performance of the firms, while capital employed resources have an insignificant, and mixed effect on operating and financial performance of the firms. This means that the more the firms will accumulate intellectual capital resources, the higher will be their operating and financial performance. Capital employed resources have a significant, positive effect on stock market performance of the firm, and intellectual capital also affects stock market performance, but this relationship is insignificant in nature. The accumulated effect of all the resources (physical & intellectual) shows a positive relationship with the performing areas of the firm in the sector.

Development of Quality Digital Innovation by Optimally Utilizing Company Resources to Increase Competitive Advantage and Business Performance

“…In terms of the relationship between company resources and digital innovation, this study supports previous studies (Kohansal et al 2013;Tchuta and Xie 2017;Sulistyo and Siyamtinah 2016), which describe the significant role of company resources in digital innovation. For the relationship between company resources and business performance, the result of this study supports previous studies (Hafeez et al 2012;Bagheri et al 2013;Karami et al 2015;Yen 2013) which said there is a significant role of company resources in business performance but does not support research (Hussain and Waheed 2019) that said that company resources do not have a significant role in business performance. Meanwhile, regarding the relationship between company resources and digital innovation, the findings of this study also support previous research that stated there is a significant role of company resources in digital innovation (Kohansal et al 2013;Tchuta and Xie 2017;Sulistyo and Siyamtinah 2016), and on the relation between company resources and business performance through digital innovation, findings from this study support previous research (Hafeez et al 2012;Gurlek and Cemberci 2019;Yasa et al 2019).…”

Does board activeness strengthen the relationship between structure of corporate ownership and firm performance?

“…These reports have been submitted to the SECP and are also available on the official websites of the PSX and the concerned listed firm. The explained factors were as follows in Table 1 : operating performance was measured by total income to total sales ( Hussain and Waheed, 2019 ). Financial performance was measured by net income to total assets ( Hussain and Waheed, 2019 ).…”

“…The explained factors were as follows in Table 1 : operating performance was measured by total income to total sales ( Hussain and Waheed, 2019 ). Financial performance was measured by net income to total assets ( Hussain and Waheed, 2019 ). The market-to-equity ratio was measured by the market value per share to book value per share ( Hussain and Waheed, 2019 ).…”

“…Financial performance was measured by net income to total assets ( Hussain and Waheed, 2019 ). The market-to-equity ratio was measured by the market value per share to book value per share ( Hussain and Waheed, 2019 ). Explanatory factors were as follows: state ownership was measured by the total shares owned by the state to the total number of shares ( Vu and Pratoomsuwan, 2019 ).…”

Intellectual Capital, Members' Participation and Cooperative Performance: The Mediating Role of Management Capabilities

“…According to RBV, the resources must embrace four important attributes, i.e. valuable, rare, inimitable and non-substitutable (VRIN) in order to create superior competitive advantages as well as to improve firms' efficiency and effectiveness (Adnan et al 2018;Hussain & Waheed 2019;Ramon-Jeronimo et al 2019;. Thus, the study was built on the premise that IC, MP and MC are the intangible resources that potentially influence cooperatives performance according to the notion of RBV.…”