Skip to main content
Log in

Resource security: Competition for global resources, strategic intent, and governments as owners

  • Article
  • Published:
Journal of International Business Studies Aims and scope Submit manuscript

Abstract

We develop a resource security theory by examining the intent of acquisitions of scarce resources by multinational firms. Results suggest that owners of firms can shape the intent of resource acquisitions. Specifically, state-owned enterprises (SOEs) tend to acquire and pay more for resources for exploration rather than exploitation. This is because SOEs’ owners – governments – are most concerned with securing their country’s future. We contribute to the literature by suggesting that ownership influences resource acquisitions, that resource security is of importance to multinational enterprises, and that SOEs invest abroad to safeguard both their own and their home countries’ future.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2
Figure 3

Similar content being viewed by others

References

  • Almeida, P., & Phene, A. 2004. Subsidiaries and knowledge creation: The influence of the MNC and host country on innovation. Strategic Management Journal, 25 (8/9): 847–864.

    Article  Google Scholar 

  • Amburgey, T. L., & Rao, H. 1996. Organizational ecology: Past, present, and future directions. Academy of Management Journal, 39 (5): 1265–1286.

    Article  Google Scholar 

  • Bradshaw, M. J. 2009. The geopolitics of global energy security. Geography Compass, 3 (5): 1920–1937.

    Article  Google Scholar 

  • Bremmer, I. 2009. State capitalism comes of age. Foreign Affairs, 88 (3): 40–55.

    Google Scholar 

  • Büge, M., Egeland, M., Kowalski, P., & Sztajerowska, M. 2013. State-owned enterprises in the global economy: Reason for concern? VOX, http://www.voxeu.org/article/state-owned-enterprises-global-economy-reason-concern, accessed 2 May 2013.

  • Chakrabarty, S., & Bass, A. E. 2013a. Encouraging entrepreneurship: Microfinance, knowledge support, and the costs of operating in institutional voids. Thunderbird International Business Review, 55 (5): 545–562.

    Article  Google Scholar 

  • Chakrabarty, S., & Bass, A. E. 2013b. Comparing virtue, consequentialist, and deontological ethics based corporate social responsibility: Mitigating microfinance risk in institutional voids. Journal of Business Ethics, published online 21 November, doi: 10.1007/s10551-013-1963-0.

  • Chakrabarty, S., & Bass, A. E. 2014. Institutionalizing ethics in institutional voids: Building positive ethical strength to serve women microfinance borrowers in negative contexts. Journal of Business Ethics, 119 (4): 529–542.

    Article  Google Scholar 

  • Chakrabarty, S., & Bass, A. E. forthcoming. Corporate governance in microfinance institutions: Board composition and the ability to face institutional voids. Corporate Governance: An International Review, in press.

  • Chakrabarty, S., & Wang, L. 2012. The long-term sustenance of sustainability practices in MNCs: A dynamic capabilities perspective of the role of R&D and internationalization. Journal of Business Ethics, 110 (2): 205–217.

    Article  Google Scholar 

  • Chakrabarty, S., & Wang, L. 2013. Climate change mitigation and internationalization: The competitiveness of multinational corporations. Thunderbird International Business Review, 55 (6): 673–688.

    Article  Google Scholar 

  • Crawford, P. B. 1970. Texas offshore bidding patterns. Journal of Petroleum Technology, 22 (3): 283–289.

    Article  Google Scholar 

  • Crilly, D. 2011. Predicting stakeholder orientation in the multinational enterprise: A midrange theory. Journal of International Business Studies, 42 (5): 694–717.

    Article  Google Scholar 

  • Cuervo-Cazurra, A., & Dau, L. A. 2009. Promarket reforms and firm profitability in developing countries. Academy of Management Journal, 52 (6): 1348–1368.

    Article  Google Scholar 

  • Demsetz, H. 1983. The structure of ownership and the theory of the firm. Journal of Law and Economics, 26 (2): 375–390.

    Article  Google Scholar 

  • DP. 2012. Derrick Petroleum (DP) Services. Bangalore, India, www.derrickpetroleum.com.

  • EIA. 2012. Petroleum & other liquids. Washington, DC: US Department of Energy.

  • Flier, B., van den Bosch, F. A. J., & Volberda, H. W. 2003. Co-evolution in strategic renewal behaviour of British, Dutch and French financial incumbents: Interaction of environmental selection, institutional effects and managerial intentionality. Journal of Management Studies, 40 (8): 2163–2187.

    Article  Google Scholar 

  • Gaille, S. S. 2010. Allocation of international petroleum licenses to National Oil Companies: Insights from the Coase Thereom. Energy Law Journal, 31 (1): 111–124.

    Google Scholar 

  • Gomes, L., & Ramaswamy, K. 1999. An empirical examination of the form of the relationship between multinationality and performance. Journal of International Business Studies, 30 (1): 173–187.

    Article  Google Scholar 

  • Groysberg, B., & Lee, L.-E. 2009. Hiring stars and their colleagues: Exploration and exploitation in professional service firms. Organization Science, 20 (4): 740–758.

    Article  Google Scholar 

  • He, X., Chakrabarty, S., & Eden, L. A. forthcoming. Resource-based view of ownership and performance: Global emergence of Chinese multinationals. Long Range Planning, in press.

  • He, Z.-L., & Wong, P.-K. 2004. Exploration vs. exploitation: An empirical test of the ambidexterity hypothesis. Organization Science, 15 (4): 481–494.

    Article  Google Scholar 

  • Hoang, H., & Rothaermel, F. T. 2010. Leveraging internal and external experience: Exploration, exploitation, and R&D project performance. Strategic Management Journal, 31 (7): 734–758.

    Google Scholar 

  • Kaplowitz, M. 2004. Property rights, economics and the environment. London: Taylor and Francis.

    Google Scholar 

  • Karev, A. 2013. Oil and gas reality check 2013. Hong Kong: Deloitte Touche Tohmatsu Limited.

    Google Scholar 

  • Katusa, M. 2012. The race for energy resources gets hotter. Forbes, http://www.forbes.com/sites/energysource/2012/07/11/the-race-for-energy-resources-gets-hotter/.

  • Klein, D. B., & Robinson, J. 2011. Property: A bundle of rights? Prologue to the property symposium. Econ Journal Watch, 8 (3): 193–204.

    Google Scholar 

  • Kowalski, P., Büge, M., Sztajerowska, M., & Egeland, M. 2013. State-owned enterprises: Trade effects and policy implications. OECD Trade Policy Paper, OECD Publishing.

  • Lavie, D., Stettner, U., & Tushman, M. L. 2010. Exploration and exploitation within and across organizations. The Academy of Management Annals, 4 (1): 109–155.

    Article  Google Scholar 

  • Levinthal, D. A., & March, J. G. 1993. The myopia of learning. Strategic Management Journal, 14 (S2): 95–112.

    Article  Google Scholar 

  • Lin, J. Y., Cai, F., & Li, Z. 1998. Competition, policy burdens, and state-owned enterprise reform. The American Economic Review, 88 (2): 422–427.

    Google Scholar 

  • Marcel, V. 2006. Oil titans: National Oil Companies in the Middle East. Baltimore, MD: Brookings Institution Press.

    Google Scholar 

  • March, J. G. 1991. Exploration and exploitation in organizational learning. Organization Science, 2 (1): 71–87.

    Article  Google Scholar 

  • Mascarenhas, B. 1989. Domains of state-owned, privately held, and publicly traded firms in international competition. Administrative Science Quarterly, 34 (4): 582–597.

    Article  Google Scholar 

  • McNamara, P., & Baden-Fuller, C. 2007. Shareholder returns and the exploration–exploitation dilemma: R&D announcements by biotechnology firms. Research Policy, 36 (4): 548–565.

    Article  Google Scholar 

  • Mehta, V. S. 2013. Step on the gas. The Indian Expresshttp://www.indianexpress.com/news/step-on-the-gas/1179254/0, accessed 6 October 2013.

  • Musacchio, A., & Flores-Macias, F. 2009. The return of state-owned enterprises. Harvard International Review, 4 April, http://hir.harvard.edu/the-return-of-state-owned-enterprises.

  • Musacchio, A., & Lazzarini, S. G. 2014. Reinventing state capitalism: Leviathan in business, Brazil and beyond. Cambridge, MA: Harvard University Press.

    Book  Google Scholar 

  • Pfeffer, J., & Nowak, P. 1976. Joint ventures and interorganizational interdependence. Administrative Science Quarterly, 21 (3): 398–418.

    Article  Google Scholar 

  • Pfeffer, J., & Salancik, G. R. 1978. The external control of organizations: A resource dependence approach. New York: Harper & Row Publishers.

    Google Scholar 

  • Pirog, R. 2007. The role of National Oil Companies in the international oil market. Washington, DC: Congressional Research Service.

    Google Scholar 

  • PLS. 2012. Petroleum Listing Service (PLS), Inc. Houston, TX: www.plsx.com.

  • Ramaswamy, K., Li, M., & Veliyath, R. 2002. Variations in ownership behavior and propensity to diversify: A study of the Indian corporate context. Strategic Management Journal, 23 (4): 345–358.

    Article  Google Scholar 

  • SPE. 2007. Petroleum resources management system. Allen, TX: Society of Petroleum Engineers, American Association of Petroleum Geologists, World Petroleum Council, Society of Petroleum Evaluation Engineers.

  • SPE. 2012. SPE E&P glossary. Richardson, TX: Society of Petroleum Engineers.

  • Sundaram, A. K., & Inkpen, A. C. 2004. The corporate objective revisited. Organization Science, 15 (3): 350–363.

    Article  Google Scholar 

  • SWF. 2013. Sovereign Wealth Fund (SWF) Institute, http://www.swfinstitute.org/fund-rankings/, accessed 27 May 2014.

  • Tordo, S., Tracy, B., & Arfaa, N. 2011. National Oil Companies and value creation, Volume I, The World Bank Group.

  • Vermeulen, F., & Barkema, H. 2001. Learning through acquisitions. Academy of Management Journal, 44 (3): 457–476.

    Article  Google Scholar 

  • Volberda, H. W., van den Bosch, F. A. J., Flier, B., & Gedajlovic, E. R. 2001. Following the herd or not?: Patterns of renewal in the Netherlands and the UK. Long Range Planning, 34 (2): 209–229.

    Article  Google Scholar 

  • Voss, G. B., Sirdeshmukh, D., & Voss, Z. G. 2008. The effects of slack resources and environmental threat on product exploration and exploitation. Academy of Management Journal, 51 (1): 147–164.

    Article  Google Scholar 

  • World Bank. 2011. World Development Indicators (WDI), http://data.worldbank.org/indicator/all, The World Bank Group, accessed 27 May 2014.

  • Wry, T., Cobb, J. A., & Aldrich, H. E. 2013. More than a metaphor: Assessing the historical legacy of resource dependence and its contemporary promise as a theory of environmental complexity. The Academy of Management Annals, 7: 441–488.

    Article  Google Scholar 

  • Zif, J. 1981. Managerial strategic behavior in state-owned enterprises – Business and political orientations. Management Science, 27 (11): 1326–1339.

    Article  Google Scholar 

  • Zif, J. 1983. Explanatory concepts of managerial strategic behavior in state-owned enterprises: A multinational study. Journal of International Business Studies, 14 (1): 35–46.

    Article  Google Scholar 

Download references

Acknowledgements

The authors thank Alvaro Cuervo-Cazurra, Kannan Ramaswamy, Andrew Inkpen, Aldo Musacchio, and the reviewers for their valuable guidance. The authors extend their gratitude to the industry professionals and members of the Society of Petroleum Engineers that provided fruitful insights for this research, especially Derek Longfield, Don Verdonck, Ali Rizvi, Stephen Longfield, John Essex, and Yashodeep Deodehar. A previous version of this research was presented at Harvard Business School’s 2013 conference, Governments as Owners: Globalizing State Owned Enterprises. Both authors contributed equally to this article.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to A Erin Bass.

Additional information

Accepted by Kannan Ramaswamy, Guest Editor, 20 March 2014. This article has been with the authors for two revisions.

Both authors contributed equally to this article. Authors are listed alphabetically.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Bass, A., Chakrabarty, S. Resource security: Competition for global resources, strategic intent, and governments as owners. J Int Bus Stud 45, 961–979 (2014). https://doi.org/10.1057/jibs.2014.28

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/jibs.2014.28

Keywords

Navigation