Creating Sustainable Superior Economic Performance through Sustainable

One of the major goals in strategic management research is to identify firm-related and ind- try-related sources and determinants of profitability differences among firms. Accordingly, essential theoretical views explaining superior economic performance of firms include (1) competitive advantages realized by firms compared to their rivals and (2) industry structural characteristics. Both became prominent in strategic management research by the seminal work of Michael Porter who originally distinguished two corresponding performance effects, the positioning effect and the industry effect. Many empirical studies have already been c- ducted on these issues. The majority considered market entry barriers and industry concent- tion (as external factors), competitive strategies and resources/ capabilities (as internal f- tors) and strategic group membership (as an intermediate factor). From a strategic and long-term perspective, the sustainability of superior economic perfo- ance is of particular interest. Considerably less empirical studies have been conducted with respect to this topic. And there is no empirical study to date existing that has quantified for different industries the time span over which firms had been able to attain superior economic performance. Thomas Fritz bridges this research gap with his PhD thesis by determining the competitive advantage period (CAP) and the industry advantage period (IAP). He gives - sights concerning the sustainability of performance differences at both the intra-industry and inter-industry level.

Competitive advantages and superior performance can be interpreted as two sides of the same coin. With respect to management research, the first is mainly driven by strategic management whereas the second is a focal point in financial management. At the same time, industrial organization economics highlights the importance of industry characteristics to explain profit differences.Thomas Fritz presents a comprehensive review of empirical research on the creation of superior economic performance. He quantifies the competitive advantage period (CAP) and the industry advantage period (IAP) and determines the concrete sustainability of significant intra- and inter-industry performance differences. Based on the results for the CAP and IAP calculated for a sample of 6,385 firms from 99 industries between 1980 and 2005, the author tests determinants that affect the sustainability of intra- and inter-industry performance differences. He shows that a certain sustainability of both competitive advantages and industry advantages is achieved. Finally, he identifies general as well as industry specific levers which increase the sustainability of competitive advantages.

Past Empirical Research on the Creation of Superior Economic Performance - A Narrative and Meta-Analytic Review of Industry- and Firm-level Influences.- The Concept and Empirical Measurement of the Competitive Advantage Period and the Industry Advantage Period - A Kolmogorov-Smirnov Approach.- Determinants of the Competitive Advantage Period and the Industry Advantage Period - Analyzing Intra- and Inter-Industry Performance Influences.- Conclusion.