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The relative influence of industry and corporation on business segment performance: an alternative estimate
Author(s) -
Brush Thomas H.,
Bromiley Philip,
Hendrickx Margaretha
Publication year - 1999
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/(sici)1097-0266(199906)20:6<519::aid-smj32>3.0.co;2-8
Subject(s) - profitability index , corporation , strategic business unit , unit (ring theory) , business , industrial organization , business model , economics , marketing , finance , mathematics , mathematics education
Rumelt’s (1991) widely cited paper presents estimates of the relative influence of industry, corporate, business unit, and other influences on business unit profitability. He finds corporations explain almost none of the variability in business unit profitability. Using a simultaneous equation model, we provide alternative estimates of the influence of industry and corporation on business unit performance. We find that both corporations and industries influence business unit profitability but corporations have the larger influence. Copyright © 1999 John Wiley & Sons, Ltd.