Firm and Industry Effects on Firm Profitability:: a Spanish Empirical Analysis

The purpose of this research is to study the relative importance of firm resources (firm effect) and industry membership (industry effect) in explaining firm profitability for a set of non-diversified manufacturing companies in Spain. We seek to obtain new results that confirm or deny previous findings, with an additional interest derived from the fact that our study uses more recent data (1994-1998) about a new group of companies. Moreover, firm size and industry definition enables us to examine how the relative importance of firm and industry effects can vary according to both factors.

[1]  R. Grant.  The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation , 1991 .

[2]  M. Porter.  The Contributions of Industrial Organization To Strategic Management , 1981 .

[3]  M. Porter,et al.  HOW MUCH DOES INDUSTRY MATTER , REALLY ? , 1997 .

[4]  Harbir Singh,et al.  Corporate and industry effects on business unit competitive position , 2000 .

[5]  Robert L. Phillips,et al.  MARKETS VS. MANAGEMENT: WHAT ‘DRIVES’ PROFITABILITY? , 1996 .

[6]  R. Schmalensee.  Do Markets Differ Much , 1984 .

[7]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[8]  Moses Acquaah,et al.  Corporate Management, Industry Competition and the Sustainability of Firm Abnormal Profitability , 2003 .

[9]  Robert E. Hoskisson,et al.  BOARD OF DIRECTOR INVOLVEMENT IN RESTRUCTURING: THE EFFECTS OF BOARD VERSUS MANAGERIAL CONTROLS , 1993 .

[10]  R. Rumelt.  How much does industry matter , 1991 .

[11]  F. Scherer,et al.  Industrial Market Structure and Economic Performance. , 1971 .

[12]  P. Schoemaker,et al.  Strategic assets and organizational rent , 1993 .

[13]  Cynthia A. Montgomery,et al.  Tobin's q and the Importance of Focus in Firm Performance , 1988 .

[14]  J. Bain.  Barriers to new competition , 1957 .

[15]  Alfredo J. Mauri,et al.  Firm and industry effects within strategic management: an empirical examination , 1998 .

[16]  Margaret A. Peteraf.  The cornerstones of competitive advantage: A resource‐based view , 1993 .

[17]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[18]  Daniel A. Levinthal.  Strategic Management and the Exploration of Diversity , 1995 .

[19]  B. Wernerfelt,et al.  DETERMINANTS OF FIRM PERFORMANCE: THE RELATIVE IMPORTANCE OF ECONOMIC AND ORGANIZATIONAL FACTORS , 1989 .

[20]  Paul Geroski,et al.  The Convergence of Profits in the Long Run: Inter-firm and Inter-industry Comparisons , 1987 .

[21]  G. Hendrikse.  Fundamental Issues in Strategy , 1995 .

[22]  D. Ravenscraft.  Structure-Profit Relationships at the Line of Business and Industry Level , 1983 .

[23]  Thomas C. Powell,et al.  How much does industry matter ? An alternative empirical test , 1996 .

[24]  Joseph T. Mahoney,et al.  The resource-based view within the conversation of strategic management , 1992 .