Performance differences across strategic groups: An examination of financial market-based performance measures

• Main Authors: Pandian, J. Rajendran, THOMAS, Howard, Furrer, Olivier, Bogner, William C.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: Strategic planning; securities markets; business planning; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3972; https://ink.library.smu.edu.sg/context/lkcsb_research/article/4971/viewcontent/Pandian_Thomas_PerfDiffStrategicGrps_2006.pdf
• Institution: Singapore Management University

One of the more interesting issues in the strategic management field is the question of whether intra-industry performance differences exist, particularly across strategic groups. Most of the existing studies have used accounting measures of performance despite the documented weaknesses of such measures. This paper examines whether financial market-based measures of performance are superior to accounting-based measures in identifying performance differences across strategic groups. Hypotheses are tested on data from an existing sample of firms in the US pharmaceutical industry. The empirical results indicate that performance differences are more likely to exist across strategic groups when financial market performance measures are used. Suggestions for further refinements are made and limitations of the study are discussed.