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Competitive Interfirm Dynamics within an Industrial Market System


  • John A. Mathews


This paper develops a conceptual framework within which the fundamental resource dynamics of an economy may be investigated. The framework has heterogeneous firms at its center, and the dynamics governing their competitive, evolutionary and entrepreneurial interactions are made the object of analysis. This approach is motivated by the desire to penetrate to the resource dynamics of a capitalist economy, and to bring out the significance that interfirm resource networks play in the way that economies adapt and respond to novel situations. The management of these relational assets - resources, routines and interfirm relations - is seen as a critical issue in the success of individual firms and of whole economies. The paper embarks on this project through the synthesis of four current business perspectives, in the belief that rapid changes in the global economy call for renewed efforts towards theoretical integration. The four perspectives are the dynamic capabilities perspective on the firm (incorporating the resource-based view) as developed in the strategic management literature; the markets-as-networks view, as developed in the industrial marketing and purchasing literature; the evolutionary economic view, as developed by Nelson and Winter; and the entrepreneurial discovery view, as developed by Schumpeter and the Austrian school. It is contended that a synthesis of these perspectives will reinforce each, and lead to novel insights.

Suggested Citation

  • John A. Mathews, 2001. "Competitive Interfirm Dynamics within an Industrial Market System," DRUID Working Papers 01-01, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:01-01

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    References listed on IDEAS

    1. Nicolai J. Foss, 1996. "Firms, Incomplete Contracts and Organizational Learning," DRUID Working Papers 96-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    2. Peter Maskell, 1996. "Localised Low-tech Learning in the Furniture Industry," DRUID Working Papers 96-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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    Cited by:

    1. Andreas Pyka & Bernd Ebersberger & Horst Hanusch, 2004. "A Conceptual Framework to Model Long-run Qualitative Change in the Energy System," Chapters,in: Evolution and Economic Complexity, chapter 9 Edward Elgar Publishing.

    More about this item


    networks; firms; economic development;

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups


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