© Academy of Management Journal
1996, Vol. 39, No. 3. 519-543.
THE RESOURCE-BASED VIEW OF THE FIRM IN
TWO ENVIRONMENTS: THE HOLLYWOOD FILM
STUDIOS FROM 1936 TO 1965
Ecole des Hautes Etudes Commerciales, Montreal,
and Columbia University
New York University
This article continues to operationally define and test the resourcehased view of the firm in a study of the major U.S. film studios from 1936 to 1965. We found that property-hased resources in the form of exclusive long-term contracts with stars and theaters helped financial performance in the stable, predictable environment of 1936-50. In contrast, knowledge-based resources in the form of production and coordinative talent and budgets boosted financial performance in the more uncertain (changing and unpredictable) post-television environment of 1951-65.
The resource-based view of the firm provides a useful complement to Porter's (1980) well-known structural perspective of strategy. This view shifts the emphasis from the competitive environment of firms to the resources that firms have developed to compete in that environment. Unfortunately, although it has generated a great deal of conceptualizing (see reviews by Black and Boal  and Peteraf ), the resource-based view is just beginning to occasion systematic empirical study (Collis, 1991; Henderson & Cockburn, 1994; Montgomery & Wernerfelt, 1988; McGrath, MacMillan, & Venkatraman, 1995). Thus, the concept of resources remains an amorphous one that is rarely operationally defined or tested for its performance implications in different competitive environments. In the interests of testing and advancing the application of the resourcebased view, this research develops the distinction between property-based and knowledge-based resources. We argue that the former are likely to contribute most to performance in stable and predictable settings, whereas the latter will be of the greatest utility in uncertain—that is, changing and unpredictable—environments (Miller, 1988; Thompson, 1967). Indeed, in this article we attempt to move from a resource-based "view" toward a "theory" by progressing from description to testable prediction. A view is a product
We would like to acknowledge the helpful suggestions of Ming-Jer Chen, Steve Zyglidopoulos, and two anonymous reviewers. 519
Academy of Management Journal
of evocative description, but theory demands the formulation of falsifiable propositions.
THE NATURE OF RESOURCES
According to Wernerfelt, resources can include "anything that might he thought of as a strength or weakness of a given firm" and so "could he defined as those [tangible and intangible assets] which are tied semipermanently to the firm" (1984: 172). Resources are said to confer enduring competitive advantages to a firm to the extent that they are rare or hard to imitate, have no direct suhstitutes, and enable companies to pursue opportunities or avoid threats (Barney, 1991). The last attribute is the most obvious: resources must have some value—some capacity to generate profits or prevent losses. But if all other firms have them, resources will be unable to contribute to superior returns: their general availability will neutralize any special advantage. And for the same reason, readily availahle suhstitutes for a resource will also nullify its value. Thus, resources must be difficult to create, buy, substitute, or imitate. This last point is central to the arguments of the resource-based view (Barney, 1991; Lippman & Rumelt, 1982; Peteraf, 1993). Unusual returns cannot be obtained when competitors can copy each other. Thus, the scope of this study will he limited strictly to nonimitahle resources. Clearly, there are many resources that may meet these criteria, albeit with differing effectiveness under different circumstances: important patents or copyrights, brand names, prime distribution locations, exclusive contracts for unique factors...
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