Sustaining superior performance in an emerging economy: An empirical test in the Indian context

Strategic Management Journal

Volumn 33, Issue 2, 2012, Pages 217-229

  Chari, Murali D R ^a   David, Parthiban ^b  

^a RENSSELAER POLYTECHNIC INSTITUTE   (United States)

^b AMERICAN UNIVERSITY   (United States)

Author keywords

emerging economy; India; pro market reforms; profit persistence; sustained superior performance

Indexed keywords

EMERGING ECONOMIES; INDIA; PRO-MARKET REFORMS; PROFIT PERSISTENCE; SUSTAINED SUPERIOR PERFORMANCE;

COMMERCE; MARKETING; PROFITABILITY; SUSTAINABLE DEVELOPMENT;

ECONOMICS;

EID: 83555165015     PISSN: 01432095     EISSN: 10970266     Source Type: Journal    
DOI: 10.1002/smj.949     Document Type: Review

References (69)

1. Agosin MR, Machado R,. 2006. Openness and the international allocation of foreign direct investment. Inter-American Development Bank Economic and Sector Study Series, Washington, DC.
2. Ahluwalia MS,. 2002. Economic reforms in India since 1991: has gradualism worked? Journal of Economic Perspectives 16 (3): 67-88.
3. Aiken LS, West SG,. 1991. Multiple Regression: Testing and Interpreting Interactions. Sage Publications: Newbury Park, CA.
4. Armour J, Deakin S, Lele P, Siems M,. 2009. How do legal rules evolve? Evidence from a cross-country comparison of shareholder, creditor, and worker protection. American Journal of Comparative Law 57 (3): 579-629.
5. Barney J,. 1991. Firm resources and sustained competitive advantage. Journal of Management 17 (1): 99-120.
6. Baughn C, Sugheir JS, Neupert K,. 2008. Labor flexibility and the prevalence of high-growth entrepreneurial activity. Frontiers of Entrepreneurship Research 28 (18):Article 1. Available at: (28 June 2010).
7. Bhattacharjea A,. 2006. Labor market regulation and industrial performance in India: a critical review of the empirical evidence. Working paper 141, Centre for Development Economics, Delhi School of Economics, New Delhi, India.
8. Bowonder B, Richardson PK,. 2000. Liberalization and the growth of business-led R&D: the case of India. R&D Management 30 (4): 279-288.
9. Brouthers KD, Brouthers LE, Werner S,. 2008. Resource-based advantages in an international context. Journal of Management 34 (2): 189-217.
10. Chacar A, Newburry W, Vissa B,. 2010. Bringing institutions into performance persistence research: exploring the impact of product, financial, and labor market institutions. Journal of International Business Studies 41: 1119-1140.
11. Chacar A, Vissa B,. 2005. Are emerging economies less efficient? Performance persistence and the impact of business group affiliation. Strategic Management Journal 26 (10): 933-946. (Pubitemid 41337832)
12. Chari A, Gupta N,. 2008. Incumbents and protectionism: the political economy of foreign entry liberalization. Journal of Financial Economics 88 (3): 633-656.
13. Choi J, Wang H,. 2009. Stakeholder relations and the persistence of corporate financial performance. Strategic Management Journal 30 (8): 895-907.
14. Cuervo-Cazurra A, Dau LA,. 2009a. Promarket reforms and firm profitability in developing countries. Academy of Management Journal 52 (6): 1348-1368.
15. Cuervo-Cazurra A, Dau LA,. 2009b. Structural reform and firm exports. Management International Review 49 (4): 479-507.
16. de Melo M, Denizer C, Gelb A,. 1996. Patterns of transition from plan to market. World Bank Economic Review 10 (3): 397-424.
17. Eklund JE, Wiberg D,. 2008. R&D and the persistence of profits. IUP Journal of Managerial Economics 6 (2): 40-54.
18. EOI. 2000. Intellectual property rights in India. Embassy of India. Available at: (2 June 2010).
19. Fischer S, Gelb A,. 1991. The process of socialist economic transformation. Journal of Economic Perspectives 5 (4): 91-105.
20. Galindo AJ, Micco A,. 2004. Creditor protection and financial markets: empirical evidence and implications for Latin America. Federal Reserve Bank of Atlanta Economic Review Q2: 29-37.
21. Geroski PA,. 1990. Modeling persistent profitability. In The Dynamics of Company Profits, Mueller DC, (ed). Cambridge University Press: Cambridge, UK; 15-34.
22. Ghemawat P,. 1986. Sustainable advantage. Harvard Business Review 64 (Sep-Oct): 53-58.
23. Ghemawat P, Khanna T,. 1998. The nature of diversified business groups: a research design and two case studies. Journal of Industrial Economics 46 (1): 35-61. (Pubitemid 128344242)
24. Ghoshal S, Piramal G, Budhiraja S,. 2001. World Class in India: A Casebook of Companies in Transformation. Penguin Books: New Delhi, India.
25. GOI. 1991. Statement on industrial policy. Government of India. Available at: (1 January 2009).
26. Hart OD,. 1983. The market mechanism as an incentive scheme. Bell Journal of Economics 14 (2): 366-382.
27. Hermelo FD, Vassolo R,. 2010. Institutional development and hypercompetition in emerging economies. Strategic Management Journal, December Special Issue4 31: 1457-1473.
28. Hoskisson RE, Eden L, Lau CM, Wright M,. 2000. Strategy in emerging economies. Academy of Management Journal 43 (3): 249-267.
29. Jacobsen R,. 1988. The persistence of abnormal returns. Strategic Management Journal 9 (5): 415-430.
30. Kale P, Anand J,. 2006. The decline of emerging economy joint ventures: the case of India. California Management Review 48 (3): 61-76.
31. Khanna T, Palepu K,. 1999. Policy shocks, market intermediaries, and corporate strategy: the evolution of business groups in Chile and India. Journal of Economics & Management Strategy 8 (2): 271-310.
32. Khanna T, Palepu K,. 2000a. The future of business groups in emerging markets: long-run evidence from Chile. Academy of Management Journal 43 (3): 268-285.
33. Khanna T, Palepu K,. 2000b. Is group affiliation profitable in emerging markets? An analysis of diversified Indian business groups. Journal of Finance 55 (2): 867-891.
34. Khanna T, Palepu K,. 2006. Emerging giants: building world-class companies in developing countries. Harvard Business Review 84 (10): 60-69.
35. Kogut B, Zander U,. 1993. Knowledge of the firm and the evolutionary theory of the multinational corporation. Journal of International Business Studies 24 (4): 625-645.
36. Kornai J,. 1986. The Hungarian reform process: visions, hopes, and reality. Journal of Economic Literature 24: 1687-1737.
37. La Porta R, Lopez-De-Silanes F, Shleifer A, Vishny RW,. 1997. Legal determinants of external finance. Journal of Finance 52 (3): 1131-1150.
38. Lee K, Peng MW, Lee K,. 2008. From diversification premium to diversification discount during institutional transitions. Journal of World Business 43 (1): 47-65.
39. Manos R, Murinde V, Green CJ,. 2007. Leverage and business groups: evidence from Indian firms. Journal of Economics and Business 59 (5): 443-465.
40. Mazhuvanchery SV,. 2010. The Indian competition act: a historical and developmental perspective. Law and Development Review 3 (2):Article 8. Available at: (28 May 2010).
41. McGahan AM, Porter ME,. 2003. The emergence and sustainability of abnormal profits. Strategic Organization 1 (1): 79-108.
42. Mueller DC, (ed). 1990. The Dynamics of Company Profits. Cambridge University Press: Cambridge, UK.
43. Mujumdar SK,. 2008. Foreign exchange legislation transformation and enterprise demography in India. European Journal of Law and Economics 25: 39-56.
44. Nickell S,. 1981. Biases in dynamic models with fixed effects. Econometrica 49 (6): 1417-1426.
45. Nicodeme G, Sauner-Leroy J-B,. 2004. Product market reforms and productivity: a review of the theoretical and empirical literature on the transmission channelsX. European Commission: Brussels, Belgium.
46. Orozco D,. 2007. Will India and China profit from technological innovation? Northwestern Journal of Technology and Intellectual Property 5 (3): 426-435.
47. Panagaria A,. 2008. India: The Emerging Giant. Oxford University Press: New York.
48. Peng MW,. 2003. Institutional transitions and strategic choices. Academy of Management Review 28 (2): 275-296. (Pubitemid 36446328)
49. Peng MW, Sun SL, Pinkham B, Chen H,. 2009. The institution-based view as a third leg for a strategy tripod. Academy of Management Perspectives 23 (3): 63-81.
50. Peng MW, Wang DYL, Jiang Y,. 2008. An institution-based view of international business strategy: a focus on emerging economies. Journal of International Business Studies 39 (5): 920-936.
51. Peteraf MA,. 1993. The cornerstones of competitive advantage: a resource-based view. Strategic Management Journal 14 (3): 179-191.
52. Piramal G,. 1996. Business Maharajas. Penguin Books Ltd: New Delhi, India.
53. Porter ME,. 1979. How competitive forces shape strategy. Harvard Business Review 57 (March-April): 91-101.
54. Porter ME,. 1991. Towards a dynamic theory of strategy. Strategic Management Journal, Winter Special Issue 12: 95-117.
55. Pradhan JP,. 2002. Liberalization, firm size and R&D performance: a firm level study of Indian pharmaceutical industry. Journal of Indian School of Political Economy 14 (4): 647-666.
56. Prahalad CK, Lieberthal K,. 2003. The end of corporate imperialism. Harvard Business Review 81 (8): 109-117.
57. Ram P,. 2006. India's new "TRIPS-compliant" patent regime between drug patents and the right to health. Chicago-Kent Journal of Intellectual Property 5: 195-206.
58. Ramamurti R,. 2000. A multilevel model of privatization in emerging economies. Academy of Management Review 25 (3): 525-550.
59. Reitzig M, Henkel J, Heath C,. 2007. On sharks, trolls, and their patent preyâunrealistic damage awards and firms' strategies of 'being infringed.' Research Policy 36 (1): 134-154. (Pubitemid 46127705)
60. Roberts PW,. 1999. Product innovation, product-market competition and persistent profitability in the U.S. pharmaceutical industry. Strategic Management Journal 20 (7): 655-670. (Pubitemid 129658261)
61. Roberts PW, Dowling GR,. 2002. Corporate reputation and sustained superior financial performance. Strategic Management Journal 23 (12): 1077-1093. (Pubitemid 35459489)
62. Rumelt RP,. 1998. Towards a strategic theory of the firm. In Resources, Firms, and Strategies: A Reader in the Resource-Based Perspective, Foss NJ, (ed.). Oxford University Press: New York; 131-145.
63. Rumelt RP, Schendel D, Teece DJ, (eds). 1994. Fundamental Issues in Strategy: A Research Agenda. Harvard Business School Press: Boston, MA.
64. Saint-Paul G,. 1997. Is labour rigidity harming Europe's competitiveness? The effect of job protection on the pattern of trade and welfare. European Economic Review 41 (3-5): 499-506. (Pubitemid 127421145)
65. Toulan ON, Guillen MF,. 1997. Beneath the surface: the impact of radical economic reforms on the outward orientation of Argentine and Mendozan firms, 1989-1995. Journal of Latin American Studies 29 (2): 395-418.
66. Tybout JR,. 2000. Manufacturing firms in developing countries: how well do they do, and why? Journal of Economic Literature 38 (1): 11-44.
67. Waring GF,. 1996. Industry differences in the persistence of firm-specific returns. American Economic Review 86 (5): 1253-1265. (Pubitemid 126417986)
68. Wilke R, Zaichkowsky JL,. 1999. Brand imitation and its effects on innovation, competition, and brand equity. Business Horizons 42 (6): 9-18.
69. Yamawaki H,. 1989. A comparative analysis of intertemporal behavior of profits: Japan and the United States. Journal of Industrial Economics 37 (4): 389-409.