SciELO - Scientific Electronic Library Online

vol.6 issue2Brand equity evolution: a system dynamics modelDifferentiation of municipalities in São Paulo state based on constitutional transferences and income tributary taxes author indexsubject indexarticles search
Home Pagealphabetic serial listing  

Services on Demand




Related links


BAR - Brazilian Administration Review

On-line version ISSN 1807-7692


BRITO, Luiz Artur Ledur  and  VASCONCELOS, Flávio Carvalho de. The variance composition of firm growth rates. BAR, Braz. Adm. Rev. [online]. 2009, vol.6, n.2, pp.118-136. ISSN 1807-7692.

Firms exhibit a wide variability in growth rates. This can be seen as another manifestation of the fact that firms are different from one another in several respects. This study investigated this variability using the variance components technique previously used to decompose the variance of financial performance. The main source of variation in growth rates, responsible for more than 40% of total variance, corresponds to individual, idiosyncratic firm aspects and not to industry, country, or macroeconomic conditions prevailing in specific years. Firm growth, similar to financial performance, is mostly unique to specific firms and not an industry or country related phenomenon. This finding also justifies using growth as an alternative outcome of superior firm resources and as a complementary dimension of competitive advantage. This also links this research with the resource-based view of strategy. Country was the second source of variation with around 10% of total variance. The analysis was done using the Compustat Global database with 80,320 observations, comprising 13,221 companies in 47 countries, covering the years of 1994 to 2002. It also compared the variance structure of growth to the variance structure of financial performance in the same sample

Keywords : variance components; growth; competitive advantage.

        · text in English     · English ( pdf epdf )


Creative Commons License All the contents of this journal, except where otherwise noted, is licensed under a Creative Commons Attribution License