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"Firm-Specific Knowledge Resources and Competitive Advantage: The Roles of Economic- and Relationship-Based Employee Governance Mechanisms"

Heli C. Wang, Jinyu He, and Joseph T. Mahoney

 

First Author :

Heli C. Wang
Management of Organizations
Hong Kong University of Science & Technology, School of Business and Management
Kowloon, Hong Kong
China

852-2358-7743
852-2335-5325 (Fax)

mnheli@ust.hk


Second Author :

Jinyu He
Management of Organizations
Hong Kong University of Science & Technology, School of Business and Management
Kowloon, Hong Kong
China

852-2358-7738
852-2335-5325 (Fax)

mnjhe@ust.hk


Third Author :

Joseph T. Mahoney
Business Administration
University of Illinois at Urbana-Champaign, College of Business
1206 S. Sixth Street, MC 706
Champaign, IL 61820
USA

josephm@uiuc.edu

http://www.business.uiuc.edu/faculty/mahoney.html

 
 
Abstract :
 
The resource-based view of the firm emphasizes the role of firm-specific resources, especially firm-specific knowledge resources, for enabling a firm to gain and sustain competitive advantage. However, since the deployment of firm-specific knowledge frequently requires key employees to make specialized human capital investments that are not easily transferable to other settings, employees with foresight may be reluctant to make these specialized investments. This paper explores both economic- and relationship-based governance mechanisms that potentially mitigate this under-investment problem. The appropriate use of these governance mechanisms enables firms to obtain greater performance from their efforts to deploy firm-specific knowledge resources. Empirical results further support these arguments.
 
 
Keywords :
 
and the Resource-based View of the Firm, Employee Governance Mechanisms, Employee Human Capital, Firm-specific Knowledge Resources
 
 
Footnotes & Acknowledgements :
 
We thank Amy Hillman and Evan Offstein for their helpful comments and suggestions, and Kozhikode Rajiv Krishnan for excellent data assistance. This research was supported by the Hong Kong Research Grants Council through RGC grant HKUST6251/03H.
 
 
Manuscript Received : 2007
Manuscript Published : February 22, 2007
 
 
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