Where do resources come from? The role of idiosyncratic situations

In this paper, we examine the emergence of resources. Our analysis of technological capability acquisition by global U.S.-based chemical firms shows that the emergence of resources is inherently evolutionary. We find that path-creating search that generates resource heterogeneity is a response to idiosyncratic situations faced by firms in their local searches. Two such idiosyncratic situations- technology exhaustion and expansion beyond national markets-trigger firms in our sample to create unique innovation search paths. We also find that along a given path firms experiment in order to find the correct investment-in fact, some organizations seem to take a step backward for two steps forward-further demonstrating the evolutionary nature of the resource creation process. Copyright (C) 2004 John Wiley Sons, Ltd.