Value, Rent, and Profit: A Stakeholder Resource-based Theory

This article goes back to first principles to develop a stakeholder resource-based theory grounded in a team production view of the firm. First, the firm is conceptualized as a governance structure to facilitate stakeholder cooperation in team production and innovation. Second, value creation, value appropriation, rent, and profit are defined in ways that explicitly acknowledge the collective and dynamic nature of value creation. The resulting framework is used to explain how economic profit and stakeholder payments emerge in the interplay of value creation and appropriation. One fundamental insight is that above normal returns to shareholders result from their (privileged) position in governance structures, as opposed to a competitive market logic. Implications for resource-based theory and the notion of shareholder primacy are discussed.