The Impact of Dynamic Capabilities on Resource Access and Development

Abstract

This study analyzes dynamic capabilities that support activities directed toward accessing resources and further developing resources to make them commercially usable. We develop theory and empirically investigate the impact of dynamic capabilities on the amount and success of these activities, and whether the impact of dynamic capabilities differs between the two types of activities. Using unique data from the upstream oil industry, we develop an objective measure of dynamic capability that is distinct from the outcomes of utilizing these capabilities. We find that firms with more sophisticated dynamic capabilities undertake greater amounts of activity to access resources and further develop them prior to commercial use, and have greater success in these activities. Finally, these effects of dynamic capabilities are larger for activities directed toward initially accessing resources than toward further developing them, consistent with the potential for firms to rely on knowledge gained through resource access activity when conducting subsequent activity to further develop resources.

Keywords: dynamic capabilities, resources, exploration, capability measurement, activities

JEL Classification: D21, O31, O32, O33