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How do industry and country impact firm performance? A national and supranational analysis

Author

Listed:
  • Hernan Etiennot

    (IAE – Universidad Austral)

  • Roberto Vassolo

    (IAE – Universidad Austral
    Pontificia Universidad Católica de Chile)

  • Francisco Diaz Hermelo

    (IAE – Universidad Austral)

  • Anita McGahan

    (University of Toronto)

Abstract

We contribute to the literature of the country, industry and firm effects on performance by developing an autoregressive cross-classified mixed-effect linear model that examines heterogeneity in the profitability of corporations in emerging and developed economies, as well as corporations located in different supranational regions. To this purpose, we simultaneously decompose abnormal returns into permanent and transitory components at the firm, industry, country and industry–country levels. We find that firms in emerging countries have significantly higher rates of performance persistence and different sources of persistence compared to firms located in developed countries. These differences are also evident between different supranational regions and countries at different levels of institutional development.

Suggested Citation

  • Hernan Etiennot & Roberto Vassolo & Francisco Diaz Hermelo & Anita McGahan, 2019. "How do industry and country impact firm performance? A national and supranational analysis," Review of Managerial Science, Springer, vol. 13(4), pages 791-821, August.
    • Handle: RePEc:spr:rvmgts:v:13:y:2019:i:4:d:10.1007_s11846-017-0260-1
    DOI: 10.1007/s11846-017-0260-1
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