Sources of variation in firm profitability and growth

John Goddard, Manouchehr Tavakoli, John Ogilvie Stephen Wilson

Research output: Contribution to journalReview articlepeer-review

63 Citations (Scopus)

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 languageEnglish
Pages (from-to)495-508
Number of pages14
JournalJournal of Business Research
Volume62
Issue number4
DOIs
Publication statusPublished - 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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