Abstract/Summary

The dynamic capabilities perspective highlights that continuous asset augmentation enables firms to address changing environments and sustain competitiveness. However, the literature is still unclear about the nature, interaction, and configuration of dynamic capabilities, and why not all firms are able to successfully upgrade. We propose that the parallel and ongoing IB discussion on asset recombination and firm-specific advantages (FSAs) sheds light on this debate. Continuous asset upgrading is achievable through asset recombination, but this requires a certain set of ‘recombinant FSAs’. We delve into asset recombination by decomposing it into three different types (namely intra-firm, extra-firm, and network) depending on the source of complementary assets and organizational boundaries. We address the three procedural activities of sensing, seizing, and transforming that underlie asset recombination and discuss the associated recombinant FSAs. This study provides a better understanding of the mechanisms available to augment the firm’s asset portfolio in cross-border settings.