2010 Volume 18 Issue 2 Pages 19-39
According to Resource-Based theory, corporate competitive advantages are created from managerial resources firms own. Firms which enjoy competitive advantages tend to have characterized managerial resources different from typical companies in a same industry. Those characteristics appears in firms’ investment activities both to intangibles such as R&D and advertising expenditure and to tangibles such as plants and equipments. In this paper we defined those as discretionary investments, and tested a relationship between discretionary investments and corporate competitive advantages in three aspects such as sustainability, trend, and average investment level. Results of our empirical analyses showed that discretionary investments had significant impacts on competitive advantages of the firms. Discretionary investments have synergisms and interactions, both total volume of discretionary investments and distortion of each investment influence on firms’ competitive advantages.
