Firm‐specific knowledge resources and competitive advantage: the roles of economic‐ and relationship‐based employee governance mechanisms

By Heli Wang, Jinyu He, Joseph T. Mahoney. 2009

466 citations recorded by the source corpus.

The resource-based view of the firm emphasizes the role of firm-specific resources, especially firm-specific knowledge resources, for enabling a firm to gain and sustain competitive advantage. However, since the deployment of firm-specific knowledge frequently requires key employees to make specialized human capital investments that are not easily transferable to other settings, employees with foresight may be reluctant to make these specialized investments. This paper explores both economic- and relationship-based governance mechanisms that potentially mitigate this under-investment problem. The appropriate use of these governance mechanisms enables firms to obtain greater performance from their efforts to deploy firm-specific knowledge resources. Empirical results further support these arguments.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/15961c97ec548dc4bd6554e1d373b288439615aa

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Citations in the corpus

Who is in charge? A property rights perspective on stakeholder governance (2012, unknown): “Agents with foresight make such investments in expectation of reasonable returns and based on appropriate safeguards (McGahan, 1997; Wang and Barney 2006; Wang et al., 2009).”
Slack Resources and the Rent-Generating Potential of Firm-Specific Knowledge (2016, methodology): “Although firm-specific knowledge resources have the potential to generate economic rents for firms, knowledge employees have to make complementary investments to develop human capital to absorb and deploy those firm-specific knowledge resources (Rajan & Zingales, 2001; Wang et al., 2009).”
Rethinking Sustained Competitive Advantage from Human Capital (2012, methodology): “Scholars have used proxies such as worker tenure (e.g., Harris & Helfat, 1997), on-the-job training (e.g., Hatch & Dyer, 2004; Ployhart et al., 2011), or patent self-citations (Wang et al., 2009), but these measures do not capture whether skills are actually applicable to other firms.”
Market frictions as building blocks of an organizational economics approach to strategic management (2013, background): “…rights ex post, then a farsighted decision maker will foresee the contractual hazards of potentially having at least part of their investment appropriated, and thus there will likely be a rational underinvestment in firm-specific capabilities (Wang and Barney, 2006; Wang, He, and Mahoney, 2009 ).”
Knowing when to leap: Transitioning between exploitative and explorative R&D (2014, background): “Research workers have highly specialized skills that make them particularly well suited to a unique research project (Wang, He, and Mahoney, 2009).”
Toward a More Comprehensive Model of Firms’ Human Capital Rents (2017, background): “Thus, a recurring theme in SHC research is how firms can induce workers to develop the firm-specific skills desired by employers in the the face of potential employer opportunism (e.g., Wang & Barney, 2006; Wang et al., 2009).”
The perils of endogeneity and instrumental variables in strategy research: : Understanding through simulations (2014, background): “Nevertheless, scholars have also treated continuous variables such as employee stock ownership (Wang, He, and Mahoney, 2009), human capital investments (Sirmon and Hitt, 2009), and CEO hubris (Li and Tang, 2010) as endogenous variables.”
Awards: A strategic management perspective (2016, background): “As a relationship-based employee governance mechanism, awards help to compensate for employees’ costs of making such specialized investments (Wang, He, and Mahoney, 2009).”
Exploring the Nexus Between Human Capital, Corporate Governance and Performance: Evidence from Islamic Banks (2017, unknown): “…indicates that investing in human capital can yield better firm performance (Becker and Huselid, 2006; Morris et al., 2017; Subramony et al., 2008; Wang et al., 2009), and some studies urged governing bodies to adopt investment strategies that increase and retain firm-specific human capital…”