Heterogeneity of performance, its causes and the concept of competitive advantage: the proposal of a metric

Luiz Artur Ledur Brito and Flávio Carvalho de Vasconcelos

RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), 2004, vol. 8, issue spe, 107-129

Abstract: Opposite to what could be expected from the neoclassical economic theory, firms' performances present a wide heterogeneity. The strategy research tradition has concerned itself with the understanding, explanation and prediction of this heterogeneity. Competitive advantage is a fundamental concept in this effort. This research draws from previous studies on performance variance components to suggest an operational definition of the competitive advantage concept and a metric to measure it. The proposal is illustrated by an empirical study on results of 252 Brazilian companies from 1998 to 2001.

Date: 2004
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