Strategy and industry effects on profitability: Evidence from Greece

Strategic Management Journal

Volumn 25, Issue 2, 2004, Pages 139-165

  Spanos, Yiannis E ^a   Zaralis, George ^b   Lioukas, Spyros ^a  

^a ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS   (Greece)

^b OECD   (France)

Author keywords

Competitive advantage; Determinants of profitability; Hybrid vs. pure strategies; Industry structure

Indexed keywords

COMPETITION; INDUSTRIAL ECONOMICS; INDUSTRIAL RESEARCH; INVESTMENTS; MANUFACTURE; RESEARCH AND DEVELOPMENT MANAGEMENT; SOCIETIES AND INSTITUTIONS;

DATA QUALITY; PROFITABILITY;

INDUSTRIAL MANAGEMENT;

EID: 0742285883     PISSN: 01432095     EISSN: None     Source Type: Journal    
DOI: 10.1002/smj.369     Document Type: Article

References (145)

1. Aaker DA, Day CS. 1986. The perils of high-growth markets. Strategic Management Journal 7(5): 409-421.
2. Abernathy W, Wayne K. 1974. Limits of the learning curve. Harvard Business Review 52(5): 109-119.
3. Anagnostaki V, Louri H. 1995. Entry and exit from Greek manufacturing industry: a test of the symmetry hypothesis. International Review of Applied Economics 9(1): 86-95.
4. Anderson CR, Zeithaml CP. 1984. Stage of product life cycle, business strategy, and business performance. Academy of Management Journal 27(1): 5-24.
5. Avlonitis GJ, Gounaris SP. 1997. Marketing orientation and company performance: industrial vs. consumer goods companies. Industrial Marketing Management 26: 385-402.
6. Bain J. 1951. Relation of profit rate to industry concentration: American manufacturing, 1936-1940. Quarterly Journal of Economics 65: 293-324.
7. Bain J. 1956. Barriers to New Competition. Harvard University Press: Cambridge, MA.
8. Bain J. 1959. Industrial Organization. Wiley: New York.
9. Barney J. 1986. Strategic factor markets: expectations, luck and business strategy. Management Science 32: 1231-1241.
10. Barney J. 1991. Firm resources and sustained competitive advantage. Journal of Management 17: 99-120.
11. Bass FM, Cattin P, Wittink DR. 1978. Firm effects and industry effects in the analysis of market structure and profitability. Journal of Marketing Research 15: 3-10.
12. Beal RM. 2000. Competing effectively: environmental scanning, competitive strategy, and organizational performance in small manufacturing firms. Journal of Small Business Management 38: 27-47.
13. Berman SL, Wicks AC, Kotha S, Jones TM. 1999. Does stakeholder orientation matter? The relationship between stakeholder management and firm financial performance. Academy of Management Journal 42(7): 488-506.
14. Biggadike ER. 1979. Corporate Diversification: Entry Strategy, and Performance. Harvard University Press: Cambridge, MA.
15. Bourantas D, Papadakis V. 1997. Greek management: diagnosis and prognosis. International Journal of Management and Organization 26(3): 13-32.
16. Bourantas D, Anagnostelis J, Mantes Y. 1990. Culture gap in Greek management. Organization Studies 11(2): 261-283.
17. Bowman EH, Helfat CE. 2001. Does corporate strategy matter? Strategic Management Journal 22(1): 1-23.
18. Brozen Y. 1970. The antitrust task force deconcentration recommendation. Journal of Law and Economics 13: 279-292.
19. Buzzell RD. 1990. Commentary on 'Unobservable effects and business performance'. Marketing Science 9: 86-87.
20. Buzzell RD, Gale BT, Sultan RGM. 1975. Market share, a key to profitability. Harvard Business Review 53(1): 97-107.
21. Capon N, Farley J, Hoenig S. 1996. Toward an Integrative Explanation of Corporate Financial Performance. Kluwer: Boston, MA.
22. Carter JR. 1978. Collusion, efficiency, and antitrust. Journal of Law and Economics October: 435-444.
23. Caves EE. 1972. American Industry: Structure, Conduct, and Performance (3rd edn). Prentice-Hall: Englewood Cliffs, NJ.
24. Chappell WF, Cottle RL. 1985. Sources of concentration-related profits. Southern Economic Journal April: 1031-1037.
25. Cohen J, Cohen P. 1983. Applied Multiple Regression/Correlation Analysis for the Behavioral Sciences. Erlbaum: Hillsdale, NJ.
26. Coleman JS. 1968. The mathematical study of change. In Methodology in Social Research, Blalock H, Blalock A (eds). McGraw-Hill: New York; 428-478.
27. Collins NR, Preston LE. 1969. Price-cost margins and industry structure. Review of Economics and Statistics 51: 226-242.
28. Cubbing J, Geroski P. 1987. The convergence of profits in the long run: inter-firm and inter-industry comparisons. Journal of Industrial Economics 35: 427-442.
29. David JS, Hwang H, Pei BK, Reneau JH. 2002. The performance effects of congruence between product competitive strategies and purchasing management design. Management Science 48(7): 866-885.
30. Demsetz H. 1973. Industry structure, market rivalry, and public policy. Journal of Law and Economics 16 (April): 1-9.
31. Dess G, Rasheed AM. 1992. Commentary: generic strategies: classification, combination, and context. In Advances in Strategic Management, Shrivastava P, Huff A, Dutton J (eds). JAI Press: Greenwich, CT; 409-416.
32. Dess G, Beard D. 1984. Dimensions of organizational task environments. Administrative Science Quarterly 29: 52-73.
33. Dess G, Davis P. 1984. Porter's (1980) generic strategies as determinants of strategic group membership and organizational performance. Academy of Management Journal 27: 467-488.
34. Dess GR, Robinson R. 1984. Measuring organizational performance in the absence of objective measures: the case of privately-held firm and conglomerate business unit. Strategic Management Journal 5(3): 265-273.
35. Droucopoulos V, Thomadakis S. 1993. The share of small and medium-sized enterprise in Greek manufacturing. Small Business Economics 5: 187-196.
36. European Trend Chart on Innovation. 2000. Available at www.cordis.lu/trendchart, accessed May 2001.
37. Finkel SE. 1995. Causal Analysis with Panel Data. Sage: London.
38. Fotopoulos G, Spence N. 1997. Net entry of firms into Greek manufacturing: the effects of business conditions. Small Business Economics 9: 239-253.
39. Fotopoulos G, Spence N. 1998. Accounting for net entry into Greek manufacturing by establishments of varying size. Small Business Economics 11: 125-144.
40. Fotopoulos G, Spence N. 1999. Net entry behaviour in Greek manufacturing: consumer, intermediate and capital goods industries. International Journal of Industrial Organization 17: 1219-1230.
41. Geletkanycz MA, Hambrick DC. 1997. The external ties of top executives: implications for strategic choice and performance. Administrative Science Quarterly 42: 654-681.
42. Georgas J. 1993. Management in Greece. In Management in Western Europe: Society, Culture and Organization in Twelve Nations, Hickson DJ (ed). Walter de Gruyter: Berlin; 109-125.
43. Gisser M. 1991. Advertising, concentration and profitability in manufacturing. Economic Inquiry 29: 148-165.
44. Godfrey P, Hill C. 1995. The problem of unobservables in strategic management research. Strategic Management Journal 16(7): 519-533.
45. Gujarati D. 1995. Basic Econometrics (3rd edn). McGraw-Hill: Singapore.
46. Hall WK. 1980. Survival strategies in a hostile environment. Harvard Business Review 58(5): 75-85.
47. Hambrick D. 1983. High profit strategies in mature capital goods industries: a contingency approach. Academy of Management Journal 26: 687-707.
48. Hambrick D, Lei D. 1985. Towards an empirical prioritization of contingency variables for business strategy. Academy of Management Journal 28: 763-788.
49. Hambrick D, MacMillan IC. 1984. Asset parsimony: managing assets to manage profits. Sloan Management Review 25: 67-74.
50. Hamel G, Prahalad CK. 1994. Competing for the Future. Harvard Business School Press: Boston, MA.
51. Hamermesh RG, Silk SB. 1979. How to compete in stagnant industries. Harvard Business Review 57(5): 161-168.
52. Hansen G, Wernerfelt B. 1989. Determinants of firm performance: the relative importance of economic and organizational factors. Strategic Management Journal 10: 399-411.
53. Hardy M. 1993. Regression with Dummy Variables. Sage: Thousand Oaks, CA.
54. Harrigan K. 1981. Entry barriers and competitive strategies. Strategic Management Journal 2(4): 395-412.
55. Harris FH. 1986. Market structure and price-cost performance under endogenous profit risk. Journal of Industrial Economics 35: 35-59.
56. Hay DA, Morris DJ. 1991. Industrial Economics and Organization. Oxford University Press: Oxford.
57. Helms MM, Dibrell C, Wright P. 1997. Competitive strategies and business performance: evidence from the adhesives and sealants industry. Management Decision 35(9): 689-703.
58. Henchion M, McIntyre B. 2000. The use of regional imagery in the marketing of quality products and services. Irish Marketing Review 13(2): 19-26.
59. Hill C. 1988. Differentiation versus low cost or differentiation and low cost: a contingency framework. Academy of Management Journal 25: 265-298.
60. Hill C, Hansen G. 1991. A longitudinal study of the cause and consequences of changes in diversification in the U.S pharmaceutical industry, 1977-1986. Strategic Management Journal 12(3): 187-199.
61. Hout T, Porter ME, Rudden E. 1982. How global companies win out. Harvard Business Review 60(5): 98-108.
62. Imel B, Helmberger P. 1971. Estimation of structure-profit relationships with application to the food processing sector. American Economic Review 62: 614-627.
63. Inkpen A, Choudhury N. 1995. The seeking of strategy where it is not: toward a theory of strategy absence. Strategic Management Journal 16(4): 313-323.
64. Jacobson R. 1988. Distinguishing among competing theories of the market share effect. Journal of Marketing 52: 68-80.
65. Jacobson R. 1990. Unobservable effects and business performance. Marketing Science 9: 74-85.
66. Jacobson R, Aaker DA. 1985. Is market share all that it's cracked up to be? Journal of Marketing 49(Fall): 11-22.
67. Kazakos P. 2001. Between the State and the Market: Economy and Economic Policy in Post-War Greece 1944-2000. Patakis: Athens (in Greek).
68. Koch JV. 1974. Industrial Organization and Prices. Prentice-Hall: Englewood Cliffs, NJ.
69. Kotha S, Nair A. 1995. Strategy and environment as determinants of performance: evidence from the Japanese machine tool industry. Strategic Management Journal 16(9): 497-518.
70. Koufopoulos DN, Morgan NA. 1994. Competitive pressures force Greek entrepreneurs to plan. Long Range Planning 27(4): 435-448.
71. Kouremenos A, Avlonitis GJ. 1995. The changing consumer in Greece. International Journal of Research in Marketing 12(5): 435-449.
72. Leach DF. 1997. Concentration-profits monopoly vs. efficiency debate: South African evidence. Contemporary Economic Policy 15(April): 12-23.
73. Lee J, Miller D. 1996. Strategy, environment and performance in two technological contexts: contingency theory in Korea. Organization Studies 17: 729-750.
74. Liargovas P. 1998. The White Paper on growth, competitiveness and employment and Greek small and medium sized enterprises. Small Business Economics 11: 201-214.
75. Lolos S. 1998. Success and failure of economic policies: the experience of Greece and Portugal. Comparative Economic Studies 40(1): 72-102.
76. Louri H, Anagnostaki V. 1995. Entry in Greek manufacturing industry: Athens vs. the rest of Greece. Urban Studies 32(7): 1127-1133.
77. Louri H, Pepelasis-Minoglou I. 2001. A quantitative exploration on the determinants of de-industrialization: the case of Greece. International Review of Applied Economics 15(4): 397-410.
78. Louri H, Pepelasis-Mingolou I. 2002. A hesitant evolution: industrialization and de-industrialization in Greece over the long run. Journal of European Economic History 31(2): 321-348.
79. Lumpkin GT, Dess GG. 1996. Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of Management Review 21: 135-172.
80. MacMillan I, Hambrick D, Day D. 1982. The product portfolio and profitability: a PIMS-based analysis of industrial-product businesses. Academy of Management Journal 25: 733-755.
81. Maddala GS. 1977. Econometrics. McGraw-Hill: Tokyo.
82. Makridakis S, Caloghirou Y, Papagiannakis L, Trivellas P. 1997. The dualism of Greek firms and management: present state and future implications. European Management Journal 15(4): 381-402.
83. Mann HM. 1966. Seller concentration, barriers to entry, and rates of return in thirty industries, 1950-1960. Review of Economics and Statistics 48: 296-307.
84. Mansfield E. 1983. Technological change and market structure: an empirical study. American Economic Review 73: 205-209.
85. Martin S. 1983. Market, firm and economic performance. Monograph Series in Finance and Economics. Salomon Brothers Center for the Study of Financial Institutions, Graduate School of Business Administration, New York University, New York.
86. Martin S. 1993a. Advanced Industrial Economics. Blackwell: Oxford.
87. Martin S. 1993b. Industrial Economics: Economic Analysis and Public Policy (2nd edn). Prentice-Hall: Englewood Cliffs, NJ.
88. Mason E. 1939. Price and production policies of large-scale enterprises. American Economic Review 29(Suppl. 29): 61-74.
89. McDougall PP, Robinson RB, DeNiso AS. 1992. Modelling new venture performance: an analysis of new venture strategy, industry structure, and venture origin. Journal of Business Venturing 7: 267-289.
90. McGee JS. 1988. Industrial Organization. Prentice-Hall: Englewood Cliffs, NJ.
91. Miller A, Dess GG. 1993. Assessing Porter's (1980) models in terms of its generalizability, accuracy, and simplicity. Journal of Management Studies 30: 553-584.
92. Miller D. 1986. Configurations of strategy and structure: towards a synthesis. Strategic Management Journal 7(3): 233-249.
93. Miller D. 1988. Relating Porter's business strategies to environment and structure: analysis and performance implications. Academy of Management Journal 31: 280-308.
94. Miller D. 1992. The generic strategy trap. Journal of Business Strategy January-February: 37-41.
95. Miller D, Friesen PH. 1986. Porter's (1980) generic strategies and performance: an empirical examination with American data. Part II: Performance implications. Organization Studies 7: 255-261.
96. Mintzberg H. 1978. Patterns in strategy formation. Management Science 24: 934-949.
97. Moulton WN, Thomas H, Pruett M. 1996. Business failure pathways: environmental stress and organizational response. Journal of Management 22(4): 571-595.
98. Mueller D. 1986. Profits in the Long Run. Cambridge University Press: Cambridge, U.K.
99. Murray A. 1988. A contingency view of Porter's generic strategies. Academy of Management Review 13: 390-400.
100. Orr D. 1974. An index of entry barriers and its application to the market structure-performance relationship. Journal of Industrial Economics 23: 39-50.
101. Oustapassidis K, Vlachvei A. 1999. Profitability and product differentiation in Greek food industries. Applied Economics 32: 1293-1298.
102. Pagoulatos E, Sorensen R. 1981. A simultaneous equation analysis of advertising, concentration and profitability. Southern Economic Journal 47: 728-741.
103. Papadakis V. 1995. The contribution of formal planning systems to strategic investment decision (SID) making. British Journal of Management 6(2): 15-28.
104. Peltzman S. 1977. The gains and losses from industrial concentration. Journal of Law and Economics 20: 229-263.
105. Penrose ET. 1959. The Theory of the Growth of the Firm. Oxford University Press: Oxford, U.K.
106. Phillips L, Chand D, Buzzell R. 1983. Product quality, cost position and business performance: a test of some key hypotheses. Journal of Marketing 47: 26-43.
107. Pitelis CN, Antonakis N. 1998. Manufacturing and de-industrialization: theory, empirical evidence and the case of Greece. In International Competitiveness and Industrial Strategy, Pitelis CN, Antonakis N (eds). Tipothito: Athens; 47-61 (in Greek).
108. Porter M. 1980. Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press: New York.
109. Porter M. 1985. Competitive Advantage: Creating and Sustaining Superior Performance. Free Press: New York.
110. Porter M. 1990. The Competitive Advantage of Nations. Free Press: New York.
111. Porter M. 1991. Towards a dynamic theory of strategy. Strategic Management Journal. Winter Special Issue 12: 95-117.
112. Powell TC, Dent-Micallef A. 1997. Information technology as competitive advantage: the role of human, business, and technology resources. Strategic Management Journal 18(5): 375-405.
113. Prescott JE, Kohli AK, Venkatraman N. 1986. The market share-profitability relationship: an empirical assessment of major assertions and contradictions. Strategic Management Journal 7(2): 377-394.
114. Qualls D. 1974. Stability and persistence of economic profit margins in highly concentrated industries. Southern Economic Journal 40(4): 604-612.
115. Ramaswamy V, Gatignon H, Reibstein DJ. 1994. Competitive marketing behavior in industrial markets. Journal of Marketing 58(2): 45-55.
116. Report on the competitiveness and industrial strategy in Greece. 1997. Ministry of Development (in Greek).
117. Robinson KC, McDougall PP. 1998. The impact of alternative operationalizations of industry structural elements on measures of performance for entrepreneurial manufacturing ventures. Strategic Management Journal 19(11): 1079-1100.
118. Rumelt R. 1991. How much does industry matter? Strategic Management Journal 12(3): 167-185.
119. Sapienza HJ, Smith KG, Cannon MJ. 1988. Using subjective evaluations of organizational performance in small business research. American Journal of Small Business, Winter: 45-53.
120. Scherer FM, Ross D. 1990. Industrial Market Structure and Economic Performance (3rd edn). Houghton Mifflin: Boston, MA.
121. Schoeffler S, Buzzell R, Heany D. 1974. Impact of strategic planning on profit performance. Harvard Business Review 52(2): 137-145.
122. Shapiro D, Khemani RS. 1987. Determinants of entry an exit reconsidered. International Journal of Industrial Organization 5: 15-26.
123. Skuras D, Dimara E, Vakrou A. 2000. The day after grant-aid: business development schemes for small rural firms in lagging areas of Greece. Small Business Economics 14: 125-136.
124. Spanos YE, Lioukas S. 2001. An examination into the causal logic of rent generation: contrasting Porter's competitive strategy framework and the resource-based perspective. Strategic Management Journal 22(10): 907-934.
125. Spanos YE, Prastacos GP, Papadakis V. 2001. Greek firms and EMU: contrasting SMEs and large-sized enterprises. European Management Journal 19(6): 638-648.
126. Stalk G Jr, Hout TM. 1990. Competing Against Time: How Time-Based Competition is Reshaping Global Markets. Free Press: New York.
127. Stigler GJ. 1968. The Organization of Industry. Irwin: Homewood, IL.
128. Strickland A, Weiss L. 1976. Advertising, concentration, and price-cost margins. Journal of Political Economy 84: 1109-1121.
129. Szymanski DM, Bharadwaj SG, Varadarajan PR. 1993. An analysis of the market share-profitability relationship. Journal of Marketing 57: 1-18.
130. Tsai WM, MacMillan IC, Low MB. 1991. Effects of strategy and environment on corporate venture success in industrial markets. Journal of Business Venturing 6: 9-28.
131. Tsaliki P, Tsoulfidis L. 1998. Alternative theories of competition: evidence from Greek manufacturing. International Review of Applied Economics 12(2): 187-204.
132. Tuma N, Hannan M. 1984. Social Dynamics. Academic Press: New York.
133. Uri N. 1988. A re-examination of the relationship between industry structure and economic performance. Applied Economics 20: 1383-1400.
134. Venkatraman N. 1989. Strategic orientation of business enterprises: the construct, dimensionality, and measurement. Management Science 35(8): 942-962.
135. Vlachvei A, Oustapassidis K. 1998. Advertising, concentration and profitability in Greek food manufacturing industries. Agricultural Economics 18: 191-198.
136. Weiss LW. 1974. The concentration-profits relationship and anti-trust. In Industrial Concentration: The New Learning, Goldschmid HJ, Mann HM, Weston JF (eds). Little, Brown: Boston, MA; 184-233.
137. Wernerfelt B. 1984. A resource-based view of the firm. Strategic Management Journal 5(2): 171-180.
138. White H. 1980. A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica 49: 817-838.
139. White L. 1982. The determinants of the relative importance of small business. Review of Economics and Statistics 64(February): 42-49.
140. White R. 1986. Generic business strategies, organizational context and performance: an empirical investigation. Strategic Management Journal 7(3): 217-231.
141. Willmore L. 1994. Determinants of industrial structure: a Brazilian case study. In Transnational Corporations: Market Structure and Industrial Performance, Dunning JH (ed). United Nations Library on Transnational Corporations, Vol. 15. Routledge: London; 96-129.
142. Wright P. 1987. A refinement of Porter's strategies. Strategic Management Journal 8(1): 93-101.
143. Wright P, Hotard D, Kroll D, Chan P, Tanner J. 1990. Rivalry among firms: evidence from the apparel industry. In Strategic Management: Methods and Studies, Dean B, Cassidy J (eds). Elsevier: New York; 93-110.
144. Wright P, Kroll D, Tu I, Helms M. 1991. Generic strategies and business performance: an empirical study of the screw machine products industry. British Journal of Management 2: 1-9.
145. Yasai-Ardekani M. 1989. Effects of environmental scarcity and munificence on the relationship of context to organizational structure. Academy of Management Journal 32: 131-156.