RISING COMPLEXITY AND THE GENTRIFICATION OF SUSTAINED SUPERIOR PERFORMANCE

Resource complexity is a fundamental barrier to imitation, enabling some firms to achieve sustained superior performance (SSP). There is evidence the complexity of resources needed to implement new opportunities has risen through time, the result of increasingly sophisticated technical knowledge and rising customer demand for more sophisticated products. Through formal modeling and analyses of Compustat firms from 1967 to 2018, we find that rising complexity has gentrified the attainment and renewal of SSP. As new opportunities have become more complex, less established firms have had a harder time achieving initial SSP, while firms in the corporate elite have increasingly renewed their SSP.