Skip to content

Research at St Andrews

Performance and strategy: simultaneous equations analysis of long-lived firms

Research output: Research - peer-reviewArticle

DOI

Author(s)

Bernadette Marie Power, Gavin C Reid

School/Research organisations

Abstract

A simultaneous equations model of performance, strategy and size is tested using fieldwork evidence on long-lived firms in Scotland. Estimation is by I3SLS, with correction for sample selection bias. The contributions of this paper are that it: (a) grounds estimation on fieldwork evidence; (b) calibrates performance and competitive strategy; (c) tests and models endogeneity; and (d) computes robust trade-off elasticities between firm size and performance. It shows how this trade-off provides the entrepreneur with two strong incentives: (i) to seek greater efficiency typically by an increase in the human capital of the ‘core’ workforce; (ii) to achieve higher levels of performance by adopting more diverse competitive strategies.
Close

Details

Original languageEnglish
Pages (from-to)345-377
JournalInternational Journal of the Economics of Business
Volume22
Issue number3
DOIs
StatePublished - 19 Aug 2015

    Research areas

  • Performance, Size, Competitive strategy, Simultaneity, Mature firms

Discover related content
Find related publications, people, projects and more using interactive charts.

View graph of relations

Related by author

  1. Decision support for firm performance by real options analytics

    Power, B. & Reid, G. C. 23 Jul 2017 In : Managerial and Decision Economics. Early View, 9 p.

    Research output: Research - peer-reviewArticle

  2. In the field: Coase an exemplar in the tradition of Smith, Marshall and Ostrom

    Reid, G. C. 1 Jan 2015 In : Managerial and Decision Economics. 36, 1, p. 16-32 17 p.

    Research output: Research - peer-reviewArticle

  3. Organisational Change and Performance in Long-Lived Small Firms: A real options approach

    Reid, G. C. & Power, B. 2013 In : European Journal of Finance. 19 , 7-8, p. 791-809 19 p.

    Research output: Research - peer-reviewArticle

  4. Generalising Gibrat: Using Chinese evidence founded on fieldwork

    Reid, G. C. & Xu, Z. Nov 2012 In : Small Business Economics. 39, 4, p. 1017-1029 12 p.

    Research output: Research - peer-reviewArticle

  5. Knowledge, Scale and Transactions in the Theory of the Firm

    Reid, G. C. & CRIEFF Jan 2010 In : Economica. 77, 305, p. 209-210 2 p.

    Research output: Research - peer-reviewBook/Film/Article review

ID: 221670569