How much does industry matter?

Abstract

This study partitions the total variance in rate of return among FTC Line of Business reporting units into industry factors (whatever their nature), time factors, factors associated with the corporate parent, and business-specific factors. Whereas Schmalensee (1985) reported that industry factors were the strongest, corporate and market share effects being extremely weak, this study distinguishes between stable and fluctuating effects and reaches markedly different conclusions. The data reveal negligible corporate effects, small stable industry effects, and very large stable business-unit effects. These resulis imply ihat ihe mosf important sources of economic rents are business-specific; industry membership is a much less important source and corporate parentage is quite unimportant.

When Product Development Performance Makes a Difference: A Statistical Analysis in the Electronics Industry

“…These findings are consistent with [33,34,39], both in terms of significance of the control variable and magnitude of the adjusted R 2 value.…”

“…The remaining 5 percent are explained by our market-context variables market power, market growth, and technological stability. This result is consistent with previous findings in the strategy literature ( [33,34,39]). …”

“…In a follow-up study, Wernerfelt and Montgomery 1988 [39] derived comparable results. Finally, Rumelt (1991) [33] found 17 percent of business unit returns explained by industry membership, only half of which was due to "structural" industry differences that are stable over time, while the other half stemmed from year-to-year industry fluctuations. Using a different methodology than the one applied in these three studies, Powell (1996) [26] used perceptual data of success and industry characteristics and also found about 20 percent of success explained by the industry context.…”

“…We use business unit return on sales (ROS) as our dependent variable to be consistent with the studies quoted above [33,34,39]. Profits were defined as operating profits from the normal business, excluding extraordinary profits (or losses) and taxes.…”

Influências Não Lineares Da Indústria No Desempenho Da Firma

“…As relações entre fatores ligados à indústria e ao desempenho da firma têm sido abordadas por vários autores (e. g. Child, 1974;Hatten & Schendel, 1977;Mauri & Michaels, 1998;Prescott, 1986;Roquebert, Phillips, & Westfall, 1996;Rumelt, 1991;Schmalensee, 1985;Tirole, 1988), entre os quais há aqueles que consideram os efeitos da indústria de uma forma mais ampla (Bamiatzi & Hall, 2009;Hawawini, Subramanian, & Verdin, 2003;Kim & Reinschmidt, 2012) e os de suas características, em termos de munificência, instabilidade e complexidade (Keats & Hitt, 1988), de concentração (Griffiths, Jensen, & Webster, 2011;Sharma, 2011) e rivalidade (Cool & Dierickx, 1993;Cool, Dierickx, & Jemison, 1989;Mas-Ruiz & Ruiz-Moreno, 2011), que, em sua maioria, abordam tais relações sob uma perspectiva linear.…”