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Practice Makes Profit: Business Practices and Firm Success

Author

Listed:
  • Fabling, Richard

    (Ministry of Economic Development, New Zealand)

  • Grimes , Arthur

    () (Motu Economic & Public Policy Research & University of Waikato.)

Abstract

Which business practices set successful firms apart from others? We address this question using data from an official survey of almost 3,000 New Zealand firms. Questions cover: leadership, planning practices, customer and supplier focus, employee practices, quality and process monitoring, benchmarking, community and social responsibility, innovation, IT use, business structure and the competitive environment. Some of these are internal practices reflecting a firm’s resources and capabilities; some are characteristics of the external environment. We find that capital investment choices, R&D practices, market research and a range of employee practices are positively associated with firm success; industry structure is also a key determinant of success. The association between specific business practices and firm success is mostly independent of firm size, age and industrial sector, other than for export marketing.

Suggested Citation

  • Fabling, Richard & Grimes , Arthur, 2006. "Practice Makes Profit: Business Practices and Firm Success," Occasional Papers 06/1, Ministry of Economic Development, New Zealand.
  • Handle: RePEc:ris:nzmedo:2006_001
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    References listed on IDEAS

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    6. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
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    Citations

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    Cited by:

    1. Hong Shangqin & Philip McCann & Les Oxley, 2013. "Innovation in New Zealand: issues of firm size, local market size and economic geography," Chapters,in: Handbook of Industry Studies and Economic Geography, chapter 19, pages 459-478 Edward Elgar Publishing.
    2. Richard Fabling & Arthur Grimes, 2009. "The "suite" smell of success: complementary personnel practices and firm performance," Reserve Bank of New Zealand Discussion Paper Series DP2009/13, Reserve Bank of New Zealand.
    3. Fabling, Richard & Grimes, Arthur, 2005. "Insolvency and economic development: Regional variation and adjustment," Journal of Economics and Business, Elsevier, vol. 57(4), pages 339-359.
    4. repec:nup:jrmdke:v:5:y:2017:i:3:415-437 is not listed on IDEAS
    5. Fabling, Richard & Grimes, Arthur & Stevens, Philip, 2008. "A Comparison of Qualitative and Quantitative Firm Performance Measures," Occasional Papers 08/4, Ministry of Economic Development, New Zealand.
    6. Maré, Dave C. & Fabling, Richard & Stillman, Steven, 2011. "Immigration and Innovation," IZA Discussion Papers 5686, Institute for the Study of Labor (IZA).
    7. Fabling, Richard & Grimes, Arthur, 2007. "HR Practices and Firm Performance: What Matters and Who Does It?," Occasional Papers 07/2, Ministry of Economic Development, New Zealand.
    8. David C. Maré & Richard Fabling & Steven Stillman, 2014. "Innovation and the local workforce," Papers in Regional Science, Wiley Blackwell, vol. 93(1), pages 183-201, March.
    9. Greene, Francis, 2012. "Should the focus of publicly provided small business assistance be on start-ups or growth businesses?," Occasional Papers 12/2, Ministry of Economic Development, New Zealand.
    10. Fabling, Richard, 2007. "Just How Innovative are New Zealand Firms? Quantifying & Relating Organisational and Marketing Innovation to Traditional Science & Technology Indicators," Occasional Papers 07/4, Ministry of Economic Development, New Zealand.

    More about this item

    Keywords

    Firm Behavior;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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