The non-linear industry effects on firm performance

• Autor(a) principal: Carvalho, Julia Pinto de
• Data de Publicação: 2016
• Outros Autores: Dias, Alexandre Teixeira
• Tipo de documento: Artigo
• Idioma: por
• Título da fonte: Revista de Administração de Empresas
• Texto Completo: https://periodicos.fgv.br/rae/article/view/64132
• topic: Performance; Competitive advantage; Profitability; Industry environment; Non-linear multiple regression; Desempeño; Ventaja competitiva; Lucratividad; Ambiente de la industria; Regresión múltiple no lineal; Desempenho; Vantagem competitiva; Lucratividade; Ambiente da indústria; Regressão múltipla não-linear

This paper aims to investigate the effects of the industry environment on firm’s performance, by using a non-linear regression model. The samples used range from 178 (2005) to 252 (2012) publicly traded Brazilian firms, active in the period from 2005 to 2012. The analysis, which uses the variance decomposition method, allows one to identify a tendency for the influence of rivalry to increase a firm’s performance. The quadratic relationship identified here points to an equilibrium point of the industry environment effect that, if exceeded, may cause a reverse effect on profitability. These results are in line with the view that as rivalry increases, as measured in terms of rivals’ performance, so the possibility of obtaining a better sales performance also increases, until the point where the level of rivalry intensity becomes a barrier to increasing sales any further.