|Title of host publication||The Palgrave Encyclopedia of Strategic Management|
|Editors||Mie Augier, David J. Teece|
|Publication status||Published - 2016|
This entry discusses patterns of resource erosion (alternatively called resource decay, leakage, depreciation). Taking a stocks-flows perspective, erosion is conceptualized as the loss of value per period (e.g., a year) of an asset stock (e.g., R&D capital, brand loyalty) as a consequence of a variety of mechanisms (e.g., R&D spillovers, customers leaving, expiration of a patent). The entry discusses two patterns of erosion, linear and exponential, and explores their strategic implications. It also discusses some unexpected outcomes that may result from the combined effect of common growth and decay patterns, as well as additional difficulties that stem from inference lags.