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Heterogeneity of performance, its causes and the concept of competitive advantage: the proposal of a metric

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  • Luiz Artur Ledur Brito
  • Flávio Carvalho de Vasconcelos

Abstract

Opposite to what could be expected from the neoclassical economic theory, firms' performances present a wide heterogeneity. The strategy research tradition has concerned itself with the understanding, explanation and prediction of this heterogeneity. Competitive advantage is a fundamental concept in this effort. This research draws from previous studies on performance variance components to suggest an operational definition of the competitive advantage concept and a metric to measure it. The proposal is illustrated by an empirical study on results of 252 Brazilian companies from 1998 to 2001.

Suggested Citation

  • Luiz Artur Ledur Brito & Flávio Carvalho de Vasconcelos, 2004. "Heterogeneity of performance, its causes and the concept of competitive advantage: the proposal of a metric," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 8(spe), pages 107-129.
    • Handle: RePEc:abg:anprac:v:8:y:2004:i:spe:350
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