Comparing the resource-based and market-based views of the firm: empirical evidence from Czech privatization

Deskripsi

The recent privatization of state-owned enterprises in the Czech Republic forms a natural experiment to test and compare the predictive ability of the resource-based view (RBV) against the market-based view (MBV) under conditions of great change. In order to test this notion, an RBV model was developed, based on a set of firm features reflecting the rare and valuable ability to compete in the emerging capitalistic economy. A contrasting MBV model was also developed, highlight the role of market power in this regard. These models were assessed in a cross-section sample of 988 Czech firms undergoing privatization. The empirical findings show that the RBV-driven variables are remarkably better at explaining share values of Czech firms in the period of privatization than MBV-driven variables. These results underscore the role of firm resources as a primary determinant of firm value in rapidly changing environments.Printed Journal