The persistence of knowledge‐based advantage: an empirical test for product performance and technological knowledge

TLDR

Resource‑based theory posits that tacit, complex, and specific knowledge protects firms from imitation and sustains performance, yet empirical support is limited and the trade‑off with innovation remains unclear. The study investigates how a firm’s knowledge complexity, tacitness, and specificity influence the durability of its performance advantages. The authors find that complex and tacit technological knowledge shields major product improvements from imitation, while design specificity only delays imitation of minor improvements. © 2002 John Wiley & Sons, Ltd.

Abstract

Abstract Resource‐based theory maintains that intrinsic characteristics of resources and capabilities, such as their tacitness, complexity, and specificity, prevent imitation and thereby prolong exceptional performance. There is little direct evidence to verify these claims, yet a substantial literature encourages firms to formulate competitive strategies around resources with these attributes. Further, work outside the resource‐based tradition suggests that these attributes can slow innovation, and it is not clear when this effect outweighs the benefits of inimitability. This paper seeks to clarify whether and how the complexity, tacitness, and specificity of a firm's knowledge affect the persistence of its performance advantages. We find that the complexity and tacitness of technological knowledge are useful for defending a firm's major product improvements from imitation, but not for protecting its minor improvements. The design specificity of technological knowledge delayed imitation of minor improvements in this study. Copyright © 2002 John Wiley & Sons, Ltd.