Firm, strategic group, and industry influences on performance

A long-standing debate has focused on the extent to which different levels of analysis shape firm performance. The strategic group level has been largely excluded from this inquiry, despite, evidence that group membership matters. In this study, we use hierarchical linear modeling to simultaneously estimate firm-, strategic group-, and industry-level influences oil short-term and long-term measures of performance. We assess the three levels' explanatory power using a sample of 1, 165 firms in 12 industries with data from a 7-year period. To enhance comparability to previous research, we also estimate the effects using the variance components and ANOVA methods relied 017 in past studies. To assess the robustness of strategic group effects, we examine both deductively and inductively defined groups. We found that till three levels are significantly associaled with performance. The firm effect is the strongest, while the strategic group effect rivals and for some measures outweighs the industry effect. We also found that the levels have varying effects in relation to different performance measures, suggesting more complex relationships than depicted in previous studies. Copyright (c) 2007 John Wiley & Sons, Ltd.