Theoretical analysis demonstrates how strategic asset accumulation limits imitation across firms, indicating that sustainable competitive advantage relies on cumulative investment paths.
Given incomplete factor markets, appropriate time paths of flow variables must be chosen to build required stocks of assets. That is, critical resources are accumulated rather than acquired in “strategic factor markets” (Barney [Barney, J. 1986. Strategic factor markets: Expectations, luck, and business strategy. Management Sci. (October) 1231–1241.]). Sustainability of a firm's asset position hinges on how easily assets can be substituted or imitated. Imitability is linked to the characteristics of the asset accumulation process: time compression diseconomies, asset mass efficiencies, inter-connectedness, asset erosion and causal ambiguity.
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Dierickx et al. (1989) studied this question.
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