Abstract

While strategic orientations suggested in the literature circumscribe firm behavior along many dimensions, none can adequately explain why some firms and not others choose to pursue technological arbitrage opportunities (Anokhin & Wincent, 2014). Such opportunities have to do with market inefficiency and imperfect information whereby most industries sustain firms combining similar resources with varying degrees of efficiency, and a typical firm may earn above-average returns by adopting leaders’ superior resource combinations. Building on the work of Hayek (1945), Kirzner (1979; 2009), and Anokhin and colleagues (2010, 2011, 2014), we propose that a novel strategic orientation – arbitrage orientation (AO) – explains why firms choose to pursue such opportunities and suggest that accounting for it assists in understanding competitive advantage.

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