Accounting for competitive advantage: The resource-based view of the firm andthe labour theory of value

This article uses accounting concepts to assist the field of strategicmanagement in its search for a theory of value, competitive advantage andsuperior profitability. Specifically, it argues that the resource-based view ofthe firm requires a labour theory of value creation. Using the circuit ofcapital as an organizing framework this article integrates RBV and Marx's valuetheory, by introducing the notion of value as socially necessary labour time,into the analysis of resource-based advantage. This enables us to identify theimpact of particular sources of competitive advantage as they become diffusedthrough an industry. Some resource-based advantages, when eventually imitatedlead to an overall reduction in industry profitability, and other advantageslead to increases in industry average profitability.