The Diffusion of E-commerce in Developing Economies

The Diffusion of E-commerce in Developing Economies

A Resource-based Approach

Zeinab Karake Shalhoub and Sheikha Lubna Al Qasimi

The authors of this unique volume provide a timely and valuable perspective on how technology and the Internet revolution are changing business and spurring development across the world, especially in emerging countries. Utilizing a framework grounded in rigorous theory, they provide a fine-grained understanding of electronic commerce adoption processes by public and private sector entities in developing countries. In so doing, they consider how each exchange encounter is shaped by, and in turn shapes, relational characteristics that form the basis for growth and development.

Chapter 3: Resource-Based View and Theory

Zeinab Karake Shalhoub and Sheikha Lubna Al Qasimi

Subjects: business and management, international business, development studies, development economics, economics and finance, development economics, international business, international economics


INTRODUCTION One of the fundamental missions of strategic management research is to investigate and explain differences in performance among firms. The reigning incumbent explanation for the heterogeneity of firm economic performance is based on the concept of competitive advantage. More work has focused on the expanded concept of sustained competitive advantage, which, simply put, is the idea that some forms of competitive advantage are very difficult to imitate and can therefore lead to persistent superior economic performance. Popular extant theories of competitive advantage in strategic management research, based on industrial organization economics (Porter 1980, 1985) and the resource-based view (RBV) of the firm (Barney 1991; Conner 1991) predict that the factors that sustain competitive advantages will generate superior economic performance that persist over time. On the other hand, historical economic theories such as those arising from neoclassical economics and the work of the Austrian school of economics (Schumpeter, 1934), as well as the hypercompetitive model (Brown and Eisenhardt 1997, 1998; D’Aveni 1994) of strategy, predict the opposite: that temporal dynamics, resulting from factors such as imitation, entry, and the introduction of substitutes, will erode almost all competitive advantages, and thus prevent superior economic performance from persisting. More recently, Foster and Kaplan (2001) have presented an empirically based, managerial view of the transitory nature of competitive advantage and some of the economic and management mechanisms that generate it. The central questions addressed by the resource-based view concern why firms differ and how they achieve and sustain competitive advantage. Penrose (1959)...

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