Analysing industry profitability: A "complexity as cause" perspective

Adrián A. Caldart and Fernando Oliveira ()

European Management Journal, 2010, vol. 28, issue 2, 95-107

Abstract: Summary We investigate how the competitive complexity of an industrial sector affects its profitability. For that purpose, we developed a set of simulations representing industries as complex systems where different firms co-evolve linked by multiple competitive dimensions. We show that increases in the complexity of an industry, resulting from increases in the number of players and in the number of competitive dimensions linking them, damages industry performance. We also found that the negative impact on performance resulting from a higher number of competitive dimensions decreases as the number of players in the industry increases and that the decrease in industry performance associated to big increases in the number of players is mediated by the number of competitive dimensions linking them.

Keywords: Industry; structure; Competitive; strategy; Competitive; dimensions; Agent; based; simulations; Complexity; theory; Co-evolution (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0263237309000358
Full text for ScienceDirect subscribers only

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:eee:eurman:v:28:y:2010:i:2:p:95-107

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/115/bibliographic
http://www.elsevier. ... me/115/bibliographic

Access Statistics for this article

European Management Journal is currently edited by Michael Haenlein

More articles in European Management Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().