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Firm, industry and corporation effects revisited: a mixed multilevel analysis for Chilean companies

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  • J. Tarzijan
  • C. Ramirez

Abstract

The relative importance of the corporate, industry and firm effects on business performance has been studied profusely in the literature. Until now, little has been said about the nested structure of the problem. The multilevel analysis appears as a good alternative over the approaches used so far to better understand this phenomenon. This article analyses the significance of the aforesaid effects on Chilean firms and assesses the impact of various regressors on residual variances. The export intensity of firms and industries proved to have a significant impact on the estimated industry effect, making the industry-related variance statistically not different from zero. However, the industry's influence did not totally disappear, because the effect of export intensity on firms' profitability depends on the industry to which the firm belongs. Moreover, firm size turns out to be significant and positively associated with firm's return, which can be evidence of economies of scale or more efficient processes as a company grows in size.

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  • J. Tarzijan & C. Ramirez, 2011. "Firm, industry and corporation effects revisited: a mixed multilevel analysis for Chilean companies," Applied Economics Letters, Taylor & Francis Journals, vol. 18(1), pages 95-100.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:1:p:95-100
    DOI: 10.1080/13504850903425165
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    References listed on IDEAS

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    Cited by:

    1. Bart S. Vanneste, 2017. "How Much Do Industry, Corporation, and Business Matter, Really? A Meta-Analysis," Strategy Science, INFORMS, vol. 2(2), pages 121-139, June.

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