Strategic factor markets: Bargaining, scarcity, and resource complementarity

Strategic factor market theory suggests that without luck or asymmetric expectations, firms can't appropriate gains from acquired resources. Adopting the bargaining perspective on resource advantage, we hold that this is only true in the absence of resource complementarity. We extend factor mar...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Author Adegbesan, Tunji
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2007
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Summary:Strategic factor market theory suggests that without luck or asymmetric expectations, firms can't appropriate gains from acquired resources. Adopting the bargaining perspective on resource advantage, we hold that this is only true in the absence of resource complementarity. We extend factor market theory to account for resource complementarity, and we show that firms can profit when they exhibit superior complementarity to target resources, even in the absence of asymmetric expectations. Thus we provide an alternative interpretation of managers' recent emphasis on externally acquired resources.