Applicability of the Resource-Based and Dynamic-Capability Views under Environmental Volatility

Abstract

This study uses a group of informants and applies a step-by-step empirical process to examine the applicability of the resource-based view (RBV) and dynamic-capability view (DCV) to environmental volatility. Through examining 253 Taiwanese firms, this study finds that the explanatory power of DCV exceeds that of RBV in volatile environments. Firms that possess dynamic capabilities can effectively enhance their competitive advantages, despite facing highly volatile environments. Nevertheless, the RBV is effective in some ways and firms with valuable, rare, inimitable, and nonsubstitutable resources still possess competitive advantages. This article closes with theoretical and practical implications.