A heterogeneous resource based view for exploring relationships between firm performance and capabilities

Wayne S. Desarbo, C. Anthony Benedetto, Michael Song

Research output: Contribution to journalArticlepeer-review

89 Scopus citations


Purpose The resource-based view (RBV) of the firm has gained much attention in recent years as a means to understand how a strategic business unit obtains a sustainable competitive advantage. In this framework, several research studies have explored the relationships between resources-capabilities and firm performance. This paper seeks to extend this line of research by explicitly modeling the heterogeneity of such relations across firms in various different industries in exploring the interrelationships between capabilities and performance. Design-methodology-approach A unique latent structure regression model is developed to provide a discrete representation of this heterogeneity in terms of different clusters or groups of firms who employ different paths to achieve firm performance vis-a-vis alternative capabilities. An application of the proposed methodology to a sample of 216 US firms were provided. Findings Finds that the derived four group latent structure regression solution statistically dominates the one aggregate sample regression function. Substantive interpretation for the findings is provided. Originality-value The paper contributes to the understanding of the performance effects of investing in capabilities in the RBV framework, which has previously been lacking, especially in the areas of information technology capabilities.

Original languageEnglish (US)
Pages (from-to)103-130
Number of pages28
JournalJournal of Modelling in Management
Issue number2
StatePublished - Jul 10 2007

All Science Journal Classification (ASJC) codes

  • General Decision Sciences
  • Strategy and Management
  • Management Science and Operations Research


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