Sources of variation in firm profitability and growth

John Goddard; Manouchehr Tavakoli; John Ogilvie Stephen Wilson

doi:10.1016/j.jbusres.2007.10.007

Sources of variation in firm profitability and growth

John Goddard, Manouchehr Tavakoli, John Ogilvie Stephen Wilson

Centre for Responsible Banking and Finance

Research output: Contribution to journal › Review article › peer-review

Abstract

This article reports an analysis of the sources of variation in profitability and growth for manufacturing firms located in eleven European countries. A variance decomposition analysis determines the importance of the country, industry, corporate group and firm effects on profitability and growth. The analysis reveals evidence of differences between industries in the comparative advantage offered by different countries, reflecting a tendency for specialization and geographic concentration. However, as in several previous studies, the firm-level effects are the most important class of effect in explaining the variation in performance. (c) 2008 Elsevier Inc. All rights reserved.

Original language	English
Pages (from-to)	495-508
Number of pages	14
Journal	Journal of Business Research
Volume	62
Issue number	4
DOIs	https://doi.org/10.1016/j.jbusres.2007.10.007
Publication status	Published - Apr 2009

Keywords

Firm, industry and country effects
Growth
Profitability
Variance decomposition
RESOURCE-BASED VIEW
SUSTAINED COMPETITIVE ADVANTAGE
NONPARAMETRIC APPROACH
BUSINESS PERFORMANCE
STRATEGIC GROUPS
INDUSTRY MATTER
ECONOMIC-PERFORMANCE
CORPORATE-GROWTH
EMERGING MARKETS
HOME COUNTRY

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10.1016/j.jbusres.2007.10.007

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title = "Sources of variation in firm profitability and growth",

abstract = "This article reports an analysis of the sources of variation in profitability and growth for manufacturing firms located in eleven European countries. A variance decomposition analysis determines the importance of the country, industry, corporate group and firm effects on profitability and growth. The analysis reveals evidence of differences between industries in the comparative advantage offered by different countries, reflecting a tendency for specialization and geographic concentration. However, as in several previous studies, the firm-level effects are the most important class of effect in explaining the variation in performance. (c) 2008 Elsevier Inc. All rights reserved.",

keywords = "Firm, industry and country effects, Growth, Profitability, Variance decomposition, RESOURCE-BASED VIEW, SUSTAINED COMPETITIVE ADVANTAGE, NONPARAMETRIC APPROACH, BUSINESS PERFORMANCE, STRATEGIC GROUPS, INDUSTRY MATTER, ECONOMIC-PERFORMANCE, CORPORATE-GROWTH, EMERGING MARKETS, HOME COUNTRY",

author = "John Goddard and Manouchehr Tavakoli and Wilson, {John Ogilvie Stephen}",

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language = "English",

volume = "62",

pages = "495--508",

journal = "Journal of Business Research",

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T1 - Sources of variation in firm profitability and growth

AU - Goddard, John

AU - Tavakoli, Manouchehr

AU - Wilson, John Ogilvie Stephen

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N2 - This article reports an analysis of the sources of variation in profitability and growth for manufacturing firms located in eleven European countries. A variance decomposition analysis determines the importance of the country, industry, corporate group and firm effects on profitability and growth. The analysis reveals evidence of differences between industries in the comparative advantage offered by different countries, reflecting a tendency for specialization and geographic concentration. However, as in several previous studies, the firm-level effects are the most important class of effect in explaining the variation in performance. (c) 2008 Elsevier Inc. All rights reserved.

AB - This article reports an analysis of the sources of variation in profitability and growth for manufacturing firms located in eleven European countries. A variance decomposition analysis determines the importance of the country, industry, corporate group and firm effects on profitability and growth. The analysis reveals evidence of differences between industries in the comparative advantage offered by different countries, reflecting a tendency for specialization and geographic concentration. However, as in several previous studies, the firm-level effects are the most important class of effect in explaining the variation in performance. (c) 2008 Elsevier Inc. All rights reserved.

KW - Firm, industry and country effects

KW - Growth

KW - Profitability

KW - Variance decomposition

KW - RESOURCE-BASED VIEW

KW - SUSTAINED COMPETITIVE ADVANTAGE

KW - NONPARAMETRIC APPROACH

KW - BUSINESS PERFORMANCE

KW - STRATEGIC GROUPS

KW - INDUSTRY MATTER

KW - ECONOMIC-PERFORMANCE

KW - CORPORATE-GROWTH

KW - EMERGING MARKETS

KW - HOME COUNTRY

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U2 - 10.1016/j.jbusres.2007.10.007

DO - 10.1016/j.jbusres.2007.10.007

M3 - Review article

SN - 0148-2963

VL - 62

SP - 495

EP - 508

JO - Journal of Business Research

JF - Journal of Business Research

IS - 4

ER -

Sources of variation in firm profitability and growth

Abstract

Keywords

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