@article{3bcf59e489d04fc5bda17400f550bc96,
title = "Frugality-based advantage",
abstract = "We analyze frugality-based advantage and explain its types and implications. Frugality-based advantage is an advantage that a firm achieves over competitors in its ability to develop and use frugal innovations, that is, innovations that overcome external resource constraints. We differentiate among three types of frugality-based advantages based on the external constraints they solve: (1) Input frugality-based advantage, which is the result of addressing restrictions in the provision of inputs needed for the production process; (2) Income frugality-based advantage, which is driven by solving limitations in the income of consumers; and (3) Infrastructure frugality-based advantage, which is the outcome of resolving constraints in the hard and soft infrastructure of the country. We explain how these three types of frugality-based advantages differ in their transferability across locations and their sustainability across time. Frugality-based advantage complements the resource-based view by explaining how the scarcity of external resources, rather than their abundance, can support the advantage of some firms.",
keywords = "Competitive advantage, Constraints, Frugal, Innovation, Resource-based view",
author = "Kazuhiro Asakawa and Alvaro Cuervo-Cazurra and {Annique Un}, C.",
note = "Funding Information: Authors appear in alphabetical order. We thank the editor Tomi Laamanen and anonymous reviewers for their guidance and suggestions for improving the paper. We also thank Tim Devinney, Afonso Fleury, Ram Mudambi, Ravi Ramamurti, Yasuo Sugiyama, and the audience members at the Temple University conference, the Academy of International Business annual meeting, the Asia Academy of Management annual conference, the Strategic Management Society Special Conference, Japan Academy of Multinational Enterprises meeting, and Monterrey Tec in Guadalajara for their useful suggestions for improvement on previous versions of the paper. The paper was selected for Relevance for Practice Paper Recognition at the Academy of International Business. Asakawa thanks Mitsubishi Chairship Fund at Keio University Graduate School of Business Administration and Grants-in-Aids for Scientific Research (B) (no. 15H03384) by Japan Society for the Promotion of Science (JSPS) for financial support. Cuervo-Cazurra thanks the Walsh Research Professorship and the Robert Morrison Fellowship at Northeastern University for financial support. Un thanks Northeastern University for the Strategic Summer Research Award and the Center for Emerging Markets for financial support. Publisher Copyright: {\textcopyright} 2019 Elsevier Ltd",
year = "2019",
month = aug,
doi = "10.1016/j.lrp.2019.04.001",
language = "English",
volume = "52",
journal = "Long Range Planning",
issn = "0024-6301",
publisher = "Elsevier Limited",
number = "4",
}