Adaptation, Specialization, and the Theory of the Firm
Foundations of the Resource-Based View

'Birger Wernerfelt is best known to management scholars as one of the key founders of strategy’s dominant perspective, the resource-based view. However, Wernerfelt is also an extremely creative economist with a particular gift for building simple, rigorous, and very powerful models. As this book shows, his thinking on the nature of the firm has consistently evolved and developed into a unique perspective. It will be of direct relevance for scholars in fields such as strategy, organization theory, marketing and international business.' Nicolai J. Foss, Bocconi University, Italy

'For decades now, questions about the existence and performance of firms have been examined in largely separate literatures. Building on his contributions to the resource-based view and adaptation cost theory, Wernerfelt shows that to understand why firms exist we must also understand why some firms outperform others. What emerges is an integrated approach that explains both firm existence and performance differences, an approach that is likely to be very influential in strategic and economic research for some time to come.' Jay B. Barney, Presidential Professor of Strategic Management, Eccles School of Business, University of Utah

'This important book unifies two strands of Birger Wernerfelt's research that have heretofore been known to mainly separate audiences. His 'Resource-Based View' (1984) is a classic contribution to management. In contrast, Wernerfelt's recent papers on the 'Adaptation-Cost Theory' of the firm contribute to the economics literature launched by Coase and deepened by decades of subsequent research. Remarkably … the ACT not only motivates, develops and applies an important new source of exchange friction, it also provides the first unified account of the scope of firms, the size of markets, and the style of contracting - an impressive achievement and a high bar for future work. Most importantly, however, the RBV and the ACT can now be seen as two sides of the same coin; such dialogues and integrations between the management and economics literatures are enormously welcome. Robert S. Gibbons, Sloan Distinguished Professor of Management, Sloan School of Management, Massachusetts Institute of Technology