Testing VRIN framework : resource value and rareness as sources of competitive advantage and above average performance

In this study, structural equation model that analyzes the impact of resource and capability characteristics, more specifically value and rareness, on sustainable competitive advantage and above average performance is developed and empirically tested. According to the VRIN framework, if a company possesses and exploits valuable, rare, inimitable and non-substitutable resources and capabilities, it will achieve sustainable competitive advantage. Although the above mentioned statement is widely accepted in the strategy literature, there is a lack of research on characteristics of resources, especially at the conceptual level. An empirical analysis was conducted on 265 large and medium-sized Croatian companies from all industries. All relationships hypothesized by the model are statistically significant and in the expected direction. The findings suggest that the companies with more valuable and rare resources achieve higher levels of sustainable competitive advantage and performance. Since there is an interdependence between resource value and rareness, their impact on competitive advantage is both direct and indirect.