Value and rareness of resources and capabilities as sources of competitive advantage and superior performance

The premises of the resource-based theory, hypothesising that valuable and rare resources and capabilities, contribute to a firm’s competitive advantage and, consequently, superior performance, seem to be based more on intuition than empirical evidence. This study aims to empirically investigate the relationship between value, rareness, competitive advantage, and performance. Based on data from 107 Portuguese KIBS firms, the findings show that value neither is related to competitive advantage nor performance, while KIBS with rare combinations are likely to achieve higher levels of competitive advantage and performance. In addition to a direct positive influence on performance, competitive advantage was found to have a partial mediating role in the rareness–performance relationship, indicating an indirect effect of the rareness characteristic and a fundamental precedent role of competitive advantage to performance. This research contributes towards a better operationalisation of the theory, evidencing the importance of resource/capability characteristics fororganisational success.