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Resource advantage theory, resource based theory, and theory of multimarket competition: Does multimarket rivalry restrain firms from leveraging resource Advantages?

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  • Varadarajan, Rajan

Abstract

Resource-based theory explores heterogeneity in performance across firms through the lens of valuable, rare, and imperfectly imitable resource advantages, and the organization for exploiting their potential. Resource-advantage theory of competition explores heterogeneity in performance through the lens of a firm's comparative advantage in resources and competitive advantage in the marketplace. Multimarket competition refers to competitive situations where the same firms compete against each other in multiple markets. The theory of multimarket competition posits that as the degree of multimarket contact between firms increases, the market-level intensity of competition between them will decrease, due to mutual forbearance. Building on resource-advantage theory, resource-based theory, and theory of multimarket competition, this article provides insights into whether multimarket rivalry restraints refrain firms from leveraging the full potential of their resource advantages or their resource advantages prevail over multimarket rivalry restraints. The article proposes definitions of competitive advantage and sustained competitive advantage from a marketplace perspective.

Suggested Citation

  • Varadarajan, Rajan, 2023. "Resource advantage theory, resource based theory, and theory of multimarket competition: Does multimarket rivalry restrain firms from leveraging resource Advantages?," Journal of Business Research, Elsevier, vol. 160(C).
    • Handle: RePEc:eee:jbrese:v:160:y:2023:i:c:s0148296323000711
    DOI: 10.1016/j.jbusres.2023.113713
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    References listed on IDEAS

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