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The Determinants of Competitive Advantage: Capability vs. Industry Structure

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  • Harada, Tsutomu
  • Hiramine, Yoshiki

Abstract

The purpose of this study is to investigate the effects of capability and industry structure on competitive advantage in the Japanese economy. We used one of the most comprehensive data sets for Japanese firms compiled by Teikoku Databank. While related literature primarily examined the effects of industry on competitive advantage using industry dummies, this study incorporated more sophisticated measures for industry structure. The results revealed that both capability and industry structure accounted for competitive advantage. Moreover, the opposite effects of industry structure on competitive advantage between competitive and uncompetitive firms were identified. Thus, the results indicate that capability plays a more important role in accounting for competitive advantage than industry structure.

Suggested Citation

  • Harada, Tsutomu & Hiramine, Yoshiki, 2021. "The Determinants of Competitive Advantage: Capability vs. Industry Structure," TDB-CAREE Discussion Paper Series E-2021-06, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.
    • Handle: RePEc:hit:tdbcdp:e-2021-06
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/72482/070careeDP-E-2106.pdf
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    References listed on IDEAS

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    Keywords

    competitive advantage; capability; industry structure;
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