Title: Appropriating economic rents from resources: an integrative property rights and resource-based approach

Authors: Jongwook Kim, Joseph T. Mahoney

Addresses: Department of Management, College of Business and Economics, Western Washington University, 351 Parks Hall, 516 High Street, Bellingham, WA 98225, USA. ' Department of Business Administration, College of Business, University of Illinois at Urbana-Champaign, 350 Wohlers Hall, 1206 South Sixth Street, Champaign, IL 61820, USA

Abstract: Resource-based theory focuses on how economic value is created and sustained, providing the theoretical underpinnings for explaining and predicting sustainable competitive advantage. An implicit assumption of resource-based theory is that the firm|s property rights to such resources are secure. However, where property rights to potentially value-creating resources are not fully secure, as in business contexts where multiple parties are jointly participating in creating economic value, potentially value-creating combinations of resources may not be realised. Similar difficulties may arise within the firm, where multiple stakeholders that supply factor inputs are jointly producing economic value. To address these theoretical issues, we map out a property rights theory of the firm that is grounded in resource-based theory on economic rents. We emphasise how firms create economic rents (ex ante) as well as how firms appropriate or capture economic rents (ex post).

Keywords: stakeholders; property rights; economic rents; appropriation; externalities; value creation; distribution; institutions; resource-based view; RBV; resource-based theory.

DOI: 10.1504/IJLIC.2007.013820

International Journal of Learning and Intellectual Capital, 2007 Vol.4 No.1/2, pp.11 - 28

Published online: 30 May 2007 *

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