A longitudinal analysis of the impact of firm resources and industry characteristics on firm-specific profitability

Using a dynamic heterogeneous panel data model, we examine the relationship between firm-specific resources (corporate management capabilities, employee value-added and technological competence) and firm-specific profitability and the potential moderating effects of industry characteristics on this relationship. We find that firm-specific resources enhance both accounting-based measures (return on assets and return on sales) and market-based measure (Tobin’s q) of firm-specific performance. Moreover, industry characteristics moderate the relationship between firm-specific resources and firm-specific profitability. Managerial implications are discussed.

Tailan ChiEmail:

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Moses Acquaah   (Ph.D. University of Wisconsin-Milwaukee, USA) is an Assistant Professor of Business Administration (Strategic Management) at the University of North Carolina at Greensboro, USA. His current research focuses on strategic management and entrepreneurship in emerging economies. His research has been published or is forthcoming in journals such as the Strategic Management Journal, Strategic Organization, Journal of Management and Governance, Journal of Business Research, Journal of African Business, and International Journal of Production Economics. He currently serves on the Editorial Review Boards of the Journal of African Business and the International Journal of Information Security and Privacy. Tailan Chi    (PhD, University of Washington, USA) is a Professor of International Business and Strategy at the University of Kansas, USA. His research focuses on choice of market entry modes, organizational structures of multinational corporations, and market valuation of a firm’s intangible assets. He has published in journals such as Management Science, Strategic Management Journal, Journal of International Business Studies, Decision Sciences, Managerial and Decision Economics, IIE Transactions, and IEEE Transactions on Engineering Management. He currently serves on the editorial boards of Strategic Management Journal, Journal of International Business Studies, Journal of World Business, and Management and Organization Review.