An Empirical Investigation into Path Dependency and Embeddedness Among Sustainable Manufacturing Capabilities Envisaged in the Natural Resource-Based View of the Firm

Abstract

The seminal and widely cited paper of Hart (1995) on the natural resource-based view of the firm, advocates that the source of competitive advantage in the imminent future will be rooted in emerging sustainable manufacturing capabilities. In order to understand how these capabilities, namely pollution prevention, product stewardship and sustainable development [clean technology] are acquired over period of time, Hart (1995) proposes two competing theories of path dependency and embeddedness. However, there is lack of empirical research on investigation of these two theories. The current study is undertaken to bridge this gap. The paper analyses the available sustainability reports of two multinational firms spanning across a number of years to derive insights on the validity of the two theories. The case observations reveal that the two theories in focus are not necessarily competing in nature but can coexist. The study adds theoretical insights to the literature and provides pointers towards future research directions in the field.