The Role of Resources and Capabilities in Value Appropriation

The matter of who appropriates the economic value created by a firm’s resources and capabilities has remained largely unresolved in strategic management. The aim of the paper is to highlight some of the shortcomings of established strategic management theory in explaining value appropriation, outline key examples of value appropriation mechanisms, and empirically illustrate the link between these mechanisms and specific firm-level resources and capabilities. Results show that particular resources and capabilities affect value appropriation through increased control, information, and switching costs. The results imply that commitment to resources and capabilities facilitating value appropriation through elevated control, information and switching costs can constitute an alternative avenue for firms to reach competitive advantage.