Fishing for an institution-based first-mover advantage: The Norwegian snow crab case
Abstract When the first Norwegian commercial catch of snow crabs was taken in the Barents Sea in 2012, an unexpected opportunity arose to create a new, profitable natural resource-based industry. However, hidden under the surface were massive biological, technological, and institutional uncertainties. This study first explores what motivated the entrepreneurs to invest in an industry exposed to extreme uncertainty and which firm and vessel resources were necessary to operate. The findings uncovered that most of the entrepreneurs had already exited another fishery with a profit. Thus, they were looking for new attractive business opportunities where they could apply resources and capabilities already accumulated. Furthermore, this study asks if there have been any survival-threatening challenges so far in the industry. The findings show that increased competition and the Russians closing the Loophole dramatically changed the opportunities for profitable fishing. Finally, the study discusses whether the players have the potential to gain a sustained institution-based first-mover advantage (FMA), i.e., a gratis fishing quota. It is argued that the snow crab vessels have positioned themselves into a historical stream of events, which can, at best, give rise to a gratis institutional protection of a valuable natural resource. Thus, if the vessels are allocated free individual transferable quotas, they will secure a sustained FMA, as a similar event is unlikely to occur in the future. Finally, in the paper, findings and implications are discussed.