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

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posted on 2023-06-07, 06:49 authored by Vasiliki BamiatziVasiliki Bamiatzi, Konstantinos Bozos, S Tamer Cavusgil, G Tomas M Hult
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.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Strategic Management Journal

ISSN

0143-2095

Publisher

Wiley

Issue

7

Volume

37

Page range

1448-1471

Department affiliated with

  • Business and Management Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2019-10-22

First Open Access (FOA) Date

2019-10-28

First Compliant Deposit (FCD) Date

2019-10-28

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