Accordingly, many SCM researchers acknowledge that firm’s specific pools
of resources can shape their SCM practices and differentiate their performance. Supply
chain engagement by a firm is an attempt to exploit valuable intangible resources
such as human capital, product advantages, technological capabilities, well-established
brand names, and management know-how. Such resources defy easy transfers through
arm’s-length contracts but are deployable in a supply chain at low cost. Therefore,
the fundamental driver of SCM practices is the stock of resources accumulated inside
the firm, and the value of supply chain engagement due to an increase in the economic
rent that accrues to firm-specific resources (Zhang and Dhaliwal, 2009). Following this
argument, Hsu et al. (2009) note that a firm’s motive for participating in a supply chain
and its success are defined largely by its intangible resources. Hunt and Davis (2008)
further argue that a firm’s competitiveness is based on the ability to exploit its
competitive advantages across supply chains, and suggest that a firm’s firm-specific
intangible resources or assets allow it to overcome the adversity of doing business
cross supply chains.