Financial Performance, Strategic Change and Industrial Concentration Dynamics in Brazilian Companies

Renato Nogueira Starling and Rafael Barreiros Porto

RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), 2014, vol. 18, issue 4, 397-415

Abstract: The impact a company's change in strategy has on its financial performance is an inconclusive topic in management. This is partially due to a failure to adopt a dynamic perspective. This study investigated the effects of past strategic changes in boards of directors, customers and products (taking into consideration the industrial concentration represented by the number of companies in the sector) on profitability, sales growth and market value of publicly traded companies. We also assessed the impact past performance and industry concentration has on subsequent strategic changes. Using data from 68 companies over ten years, we built up a within-enterprise panel analysis using generalized estimating equations, a technique that considers the temporal autocorrelation of the dependent variable. The results indicated that strategic changes generate short and long-term financial performances and these effects generate subsequent strategic changes, independent of industry concentration. This, in turn, sometimes encourages high financial performance and strategic change, but at other times discourages them. This research contributes to evolutionary causal explanations on the relationship between financial performance and strategic changes.

Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
https://rac.anpad.org.br/index.php/rac/article/view/1044/1040 (text/html)
https://rac.anpad.org.br/index.php/rac/article/download/1044/1040 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:abg:anprac:v:18:y:2014:i:4:1044

Access Statistics for this article

RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration) is currently edited by Marcelo de Souza Bispo

More articles in RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration) from ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração
Bibliographic data for series maintained by Information Technology of ANPAD ().