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The influence of institutional changes on industry effects

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  • Peregrino de Brito, Renata
  • Artur Ledur Brito, Luiz

Abstract

Changes in the environment have implications for business competitiveness. Institutional changes and government intervention not only affect company performance, but can also change an industry’s structure. In this study, we analyze the effects of changes in the institutional framework and in the government development policies on the variance partitioning of company performance. Using a longitudinal approach, we decompose profitability and growth performance indicators using a multilevel method to compare different periods of institutional changes and government intervention in Brazil. Our quasi-experimental results demonstrate that changes to the institutional environment intensified within-industry variance; and that government intervention led to variations in growth performance. In comparing the two performance variables, we also find evidence of a trade-off between profit and growth opportunities in the observed period.

Suggested Citation

  • Peregrino de Brito, Renata & Artur Ledur Brito, Luiz, 2020. "The influence of institutional changes on industry effects," Journal of Business Research, Elsevier, vol. 119(C), pages 610-618.
    • Handle: RePEc:eee:jbrese:v:119:y:2020:i:c:p:610-618
    DOI: 10.1016/j.jbusres.2020.06.063
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