On the Contingent Rent-Generating Potential of Firm-Specific Managerial Experience

The resource-based theory suggests that profitable growth of the firm is bound by firm-specific managerial capability, which has to be internally developed via accumulation of firm-specific managerial experience over time. In this study, I investigate the contingency of rent-generating potential of firm-specific managerial experience by focusing on two particular organizational characteristics — slack and uncertainty. I propose that firm-specific managerial experience realizes its rent-generating potential in conjunction with organizational slack, and firm-specific managerial experience has greater rent-generating potential when organizational uncertainty is high. Empirical evidence based on large-scale longitudinal data from 921 U.S. manufacturing firms in almost 20 years corroborates the theory. Novel implications for the resource-based theory are discussed