A RESOURCE-BASED THEORY ANALYSIS OF INTER-FIRM CO-OPERATION IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND TO THE STUDY

The resource-based views and ideologies has in modern times form the basis for the competitive advantage of a firm. This lies primarily in the application of a bundle of valuable tangible or intangible resources at the firm's disposal (Wernerfelt, 1984; Rumelt, 1984; Penrose, 1959). To transform a short-run competitive advantage into a sustained competitive advantage requires that these resources which are heterogeneous in nature and not perfectly mobile (Peteraf, 1993). Effectively, this translates into valuable resources that are neither perfectly imitable nor substitutable without great effort through inter-firm cooperation (Barney, 1991).

Cooperation between firms has become an important tool in facing the pressures of increasing global competition, and in enhancing technological capability and innovativeness. Such cooperation takes place not only between firms from developed countries, but also in the context of inter-firm relations and between firms located in the same country as well as those located in different countries. Collaboration among firms may also take a variety of different forms ranging from strategic alliances to technology partnerships, incubators or technology poles’, knowledge networks, licensing, franchising, and to vertical or horizontal subcontracting.

Cooperation may involve firms in close proximity to each other, such as those located in growth triangles’, or those which have clustered in specific locations overtime. Inter-firm cooperation is undertaken for a number of reasons: sharing of know-how, joint action, building technological capacities, taking advantage of local marketing skills, decentralizing to be closer to local markets, building user-supplier networks, and taking advantage of knowledge spillovers from location-based proximity. According to Teeter, et al (2006), for the purposes of analysis of such inter-firm cooperation activities, this study takes into consideration three broad categories of such cooperation: clustering, networks and strategic partnerships. Technically speaking, clustering is a spatial concept and does not automatically imply collaboration among the firms so located. Clustering, however, does appear to have a positive impact on enterprise development and the role that inter-firm cooperation plays in this process needs further study. Networking is most often used to describe arms-length interactions between firms such as sub-contracting relationships. Many of these are now developing into full-scale partnerships solely with a view of sharing resources. Traditional inter-firm relationships, such as licensing agreements, are also developing into newer forms of technology partnerships that are resource-based (Porter, 1980).

1.2       STATEMENT OF THE PROBLEM

In recent times especially in developing countries, inter-firm cooperation of all sorts has been rapidly increasing and has been taking place on a basis that is more and more cross-national in nature. This development is partly in response to the emergence of "resource-based production" and to the processes of economic liberalization, and globalization, accelerated by technological advances in information and communication technologies, which in turn have been increasing the pressures of global competition. It is particularly significant in industrialized countries and advanced developing countries. There are, however, wide differences in the readiness of enterprises from the developing countries to face the challenges of global economic integration through the mechanism of resource-based inter-firm cooperation. From the foregoing, the researcher is curious of making a resource-based theory analysis of inter-firm cooperation in Nigeria.

1.3       OBJECTIVES OF THE STUDY

The following are the objectives of this study:

1. To examine the basis of resource based inter-firm cooperation.
2. To examine the role of resource-based theory in the inter-firm cooperation in Nigeria.
3. To analyze the level of resource-based inter-firm cooperation practices in Nigeria.

1.4       RESEARCH QUESTIONS

1. What is the basis of resource based inter-firm cooperation?
2. What is the role of resource-based theory in the inter-firm cooperation in Nigeria?
3. What is the level of resource-based inter-firm cooperation practices in Nigeria?

1.5       HYPOTHESIS

HO: the level of resource-based inter-firm cooperation in Nigeria is not significant.

HA: the level of resource-based inter-firm cooperation in Nigeria is significant.

1.6       SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

1. The results from this study will provide basis and relevance for resource-based theory analysis in relation to inter-form cooperation as applicable in Nigeria. It will also educate on the advantages of resource-based inter-firm cooperation practices.
2. This research will be a contribution to the body of literature in the area of a resource-based theory analysis of firm cooperation in Nigeria, thereby constituting the empirical literature for future research in the subject area.

1.7       SCOPE/LIMITATIONS OF THE STUDY

This study will be limited to the banking sector of the Nigerian economy. It will also cover its level of resource-based inter-firm practices in Nigeria.

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

 Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.