R&D investment and entrepreneurial technological capabilities: existing capabilities as determinants of new capabilities

We provide a better understanding of the concept of economies of resource accumulation by studying how existing capabilities affect the development of new entrepreneurial technological capabilities. We argue that the entrepreneurial firm needs to have the capability to invest, which reflects the existence of interconnectedness of asset stocks, and the capability to absorb, which reflects the existence of asset mass efficiencies, in order to be able to develop new technological capabilities through investments in R&D. All this helps limit imitation of the firm's advantage.