Revisiting the firm, industry, and country effects on profitability under recessionary and expansion periods: a multilevel analysis

Bamiatzi, Vasiliki, Bozos, Konstantinos, Cavusgil, S Tamer and Hult, G Tomas M (2016) Revisiting the firm, industry, and country effects on profitability under recessionary and expansion periods: a multilevel analysis. Strategic Management Journal, 37 (7). pp. 1448-1471. ISSN 0143-2095

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Abstract

Despite voluminous past research, the relevance of firm, industry, and country effects on profitability, particularly under adverse contexts, is still unclear. We reconcile institutional theory with the resource‐based view and industrial organization economics to investigate the effects of economic adversity, such as the 2008 global economic crisis. Using a three‐level random coefficient model, we examine 15,008 firms across 10 emerging and 10 developed countries for the 2005–2011 period. We find that firm effects become stronger under adversity, whereas industry effects become weaker, as well as country main and interaction effects, particularly among the emerging economies. These findings confirm our assumptions that the firm's own fate is, to a great extent, self‐determined; a reality that is even more pronounced during periods of extreme economic hardship.

Item Type: Article
Keywords: firm effects, financial crisis, markets & institutions, emerging economies, hierarchical linear modeling
Schools and Departments: University of Sussex Business School > Business and Management
Depositing User: Vasiliki Bamiatzi
Date Deposited: 22 Oct 2019 10:28
Last Modified: 05 Mar 2021 12:30
URI: http://sro.sussex.ac.uk/id/eprint/87393

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