Resource redeployment as an entry advantage in resource-poor settings

• 成果类型: Article; Early Access
• 署名作者: Chauvin, Jasmina; Inoue, Carlos; Poliquin, Christopher
• 署名单位: Georgetown University; University of Illinois System; University of Illinois Urbana-Champaign; University of California System; University of California Los Angeles
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.3627
• 发表日期: 2024
• 关键词: Human capital; labor market thickness; Market entry; resource redeployment; STRATEGIC FACTOR MARKETS

摘要

Research 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.