Evidence on competitive advantage and superior stock market performance
AbstractThis article analyzes the value-relevance of industry-based and resource-based competitive advantage in a large sample of firms listed on the Oslo Stock Exchange. We measure competitive advantage by a single variable and perform a new decomposition into its underlying sources. In 1986-2005, the industry-based and the resource-based competitive advantage explain more than 20% of abnormal stock market returns, accumulated over 5 years. The resource-based advantage is almost 4 times more important than the industry-based advantage. Differences in both the return and the risk capability of firms' net assets relative to their industry peers are significant parts of the resource-based advantage, estimated at 60 and 40%, respectively. Copyright © 2009 John Wiley & Sons, Ltd.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.
Volume (Year): 31 (2010)
Issue (Month): 4 ()
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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976
Other versions of this item:
- Gjerde, Øystein & Knivsflå, Kjell Henry & Sættem, Frode, 2009. "Evidence on Competitive Advantage and Superior Stock Market Performance," Discussion Papers 2009/11, Department of Business and Management Science, Norwegian School of Economics.
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
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