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An Empirical Analysis of Strategic Groups in the Airline Industry using Latent Class Regressions
Author(s) -
Murthi B.P.S.,
Rasheed Abdul A,
Goll Irene
Publication year - 2013
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2574
Subject(s) - perspective (graphical) , latent class model , function (biology) , class (philosophy) , position (finance) , test (biology) , industrial organization , group (periodic table) , economics , marketing , strategic management , business , microeconomics , statistics , computer science , mathematics , finance , paleontology , evolutionary biology , artificial intelligence , biology , chemistry , organic chemistry
Two major controversies in strategic group research have been whether strategic groups actually exist and if so what is the best methodological approach to identify them. One perspective on strategic groups suggests that a strategic group exists if and only if the performance of a firm in the group is a function of group characteristics after controlling for firm and industry characteristics. We test this theoretical position by developing and estimating a model for the airline industry using latent class regressions. Our analysis finds evidence for the existence of four distinct strategic groups of firms in the airline industry. Copyright © 2012 John Wiley & Sons, Ltd.