Abstract
In order to establish a competitive advantage, firms must acquire or create resources at a price below their value in use. Absent pure luck, this requires managers to exercise foresight about a resource's future value and/or complementarities with pre-existing capabilities. This foresight grants managers the opportunity to exploit information asymmetries for personal gain as well as building organizational capabilities. Nevertheless, there is limited research on the extent of foresight or how managers use it. In our study of insider trading, we found that managers purchase stock well before breakthrough patents are filed. We argue for further research on the extent of managerial foresight and how it affects rent generation and appropriation.
Original language | English (US) |
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Pages (from-to) | 791-808 |
Number of pages | 18 |
Journal | Strategic Management Journal |
Volume | 26 |
Issue number | 9 |
DOIs | |
State | Published - Sep 2005 |
Keywords
- Insider trading
- Managerial foresight
- Rent appropriation
- Resource-based view
ASJC Scopus subject areas
- Business and International Management
- Strategy and Management