Resource redeployment as an entry advantage in resource‐poor settings

Author:

Chauvin Jasmina1ORCID,Inoue Carlos2ORCID,Poliquin Christopher3ORCID

Affiliation:

1. Georgetown University McDonough School of Business Washington DC USA

2. University of Illinois at Urbana‐Champaign Gies College of Business Champaign Illinois USA

3. UCLA Anderson School of Management Los Angeles California USA

Abstract

AbstractResearch SummaryScarcity of productive factors poses a challenge for firms entering underdeveloped regions. We theorize that incumbent firms can overcome scarcity of skilled human capital in local labor markets by redeploying workers from existing units. We predict that redeployment is more valuable when factor markets exhibit large differences in resource scarcity. Redeployment is also more valuable when output is highly sensitive to worker skill and is responsive to complementarities between labor and other inputs. Important implications are that redeployment can endow firms with superior resources and enable them to enter more markets. Data on sugar mills in Brazil, where a sudden demand boom incentivized expansion, corroborate the predictions. Our research identifies a new mechanism of value‐creation from resource redeployment across factor markets.Managerial SummaryFirms entering underdeveloped regions often struggle to obtain inputs needed for production, such as skilled labor. We propose that incumbent firms expanding into such regions can overcome resource scarcity by redeploying resources from their existing units. Redeployment allows firms to move resources—such as skilled workers—from markets where resources are relatively abundant to markets where they are scarce. We show that such factor market “arbitrage” is most valuable when firms operate across markets with large differences in resource scarcity and when production is sensitive to worker skill and to complementarities between inputs. By redeploying into markets suffering from resource scarcity, firms can enter more markets and seed units with superior resources. This gives incumbent firms with redeployment capabilities an advantage over de novo entrants.

Publisher

Wiley

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3