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Research Article

Resources as dual sources of advantage: Implications for valuing entrepreneurial-firm patents

  1. David H. Hsu1,*,
  2. Rosemarie H. Ziedonis2

Article first published online: 2 APR 2013

DOI: 10.1002/smj.2037

Additional Information

How to Cite

Hsu, D. H. and Ziedonis, R. H. (2013), Resources as dual sources of advantage: Implications for valuing entrepreneurial-firm patents. Strat. Mgmt. J.. doi: 10.1002/smj.2037

Author Information

  1. 1

    Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, U.S.A.

  2. 2

    Lundquist College of Business, University of Oregon, Eugene, Oregon, U.S.A.

*Correspondence to: David H. Hsu, Wharton School, University of Pennsylvania, 2028 Steinberg Hall-Dietrich Hall, Philadelphia, PA 19104, U.S.A. E-mail: dhsu@wharton.upenn.edu

Publication History

  1. Article first published online: 2 APR 2013
  2. Accepted manuscript online: 25 JAN 2013 11:58AM EST
  3. Manuscript Revised: 5 DEC 2012
  4. Manuscript Accepted: 5 DEC 2012
  5. Manuscript Received: 22 JUN 2011

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Keywords:

  • resource-based theory;
  • strategic factor markets;
  • information asymmetry;
  • signaling;
  • entrepreneurship;
  • patents

Why and how do resources provide sources of competitive advantage? This study sheds new light on this central question of resource-based theory by allowing a single resource—entrepreneurial-firm patents—to play distinctive roles in different competitive arenas. As rights to exclude others, patents serve a well-known role as legal safeguards in product markets. As quality signals, patents also could improve access and the terms of trade in factor input markets. Based on the financing activities of 370 venture-backed semiconductor start-ups, we provide new evidence that patents confer dual advantages in strategic factor markets, improved access and terms of trade, above and beyond their added product-market protection. The study has important implications for empirical tests of resource-based theory and the measurement of resource value. Copyright © 2013 John Wiley & Sons, Ltd.

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