Resources and capabilities’ effects on firm performance: what are they?

The purpose of this paper is to empirically examine the moderating effect of competitive advantage on the resource value and rareness combination and firm performance.

The authors adopted a quantitative research method to achieve the aims of this study. The data collected came from a sample of footwear firms and the hypotheses assessed by multivariate analysis.

The findings provide insights into previously inconsistent findings regarding the exploitation of resources and capabilities and contribute to resolving these issues by considering the conditions under which the resource value and rareness combination contributes to firm performance levels and the effects of competitive advantage on this relationship. Interestingly, the authors find that it cannot be inferred that the rarer the resources and capabilities combination, the greater the probability of attaining competitive advantage.

As limitations, the authors would highlight the fact that the results are specific to one particular industrial sector, and thus not susceptible to the drawing of generalisations as well as the fact that the study does not make recourse to triangulating its methodology (for example, through interviews), which would generate more precise, detailed and objective information. The findings have important managerial implications and the authors close by presenting future research directions.

This study offers an explanation for previous mixed findings on the relationship between the resource value and rareness combination and firm performance and makes a contribution regarding how such combinations are of great relevance to the organisation and business strategy to turn in better performance levels.