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The Influence of Industry Characteristics and Dynamic Capabilities on Firms’ Profitability

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  • Maja Pervan

    (Faculty of Economics, University of Split, Cvite Fiskovića 5, 21000 Split, Croatia)

  • Marijana Curak

    (Faculty of Economics, University of Split, Cvite Fiskovića 5, 21000 Split, Croatia)

  • Tomislava Pavic Kramaric

    (University Department of Professional Studies, University of Split, Kopilica 5, 21000 Split, Croatia)

Abstract

The aim of this research was to explore one of the most intriguing dimensions of every firm’s business—its performance. Aside from analysing the influence of industry’s characteristics on the firm’s performance, the authors addressed the characteristics of dynamic capabilities and their role in contribution to the firm’s ultimate success. The analysis was conducted on a sample of 118 small Croatian manufacturing companies. The application of the Structural Equation Modelling (SEM) approach revealed a statistically significant influence of both the industry’s characteristics (represented by Porter’s five forces framework) and dynamic capabilities (based on Teece’s theory) on the firm’s performance, where the influence of dynamic capabilities is proven to be larger than that of the industry.

Suggested Citation

  • Maja Pervan & Marijana Curak & Tomislava Pavic Kramaric, 2017. "The Influence of Industry Characteristics and Dynamic Capabilities on Firms’ Profitability," IJFS, MDPI, vol. 6(1), pages 1-19, December.
    • Handle: RePEc:gam:jijfss:v:6:y:2017:i:1:p:4-:d:124578
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