Microfoundations of Resources: A Theory
25 Pages Posted: 2 Apr 2020 Last revised: 21 Apr 2020
Date Written: February 1, 2020
Where do new resources come from? We build on the premise that environments feature vast reservoirs of latent resources, uses and resource combinations. However, identifying this value can be costly and difficult. In this paper we consider the thought experiment of an endowment-less firm and how it might search for and develop latent resources. We build on perception science and evolutionary biology to highlight how the notion of “searching-for” foreshortens costly search processes. Contrarian beliefs offer a mechanism for generatively seeding search and bootstrapping resources and heterogeneity. Beliefs partially solve the factor markets problem; though their realization is dependent on developing firm-specific theories of value and targeted experimentation. Our approach also addresses how firms might actively harness the adjacent possible. We conclude with a discussion of how our arguments relate to fundamental questions in the field of strategy and the resource-based view.
Keywords: resource-based view, factor markets, entrepreneurship, beliefs, adjacent possible, strategy
JEL Classification: L23, L14, L22, D20, D21, D22, D51, D52, D92, K1, M2, O33
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