Toward a general theory of competitive dominance : comments and extensions on Powell
By: POWELL, Thomas C
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Contributor(s): LLOYD, Chris J.
Material type: 
ArticlePublisher: UK : Wiley, April 2005Subject(s): Competitive dominance | Likelihood ratio | DecompositionStrategic Management Journal 26, 4, p. 385 - 394Abstract: In a recent paper, Powell ([2003]) studied 20-year performance in 21 industries, using an ordinal performance measure (wins), and the Gini coefficient as a measure of competitive dominance. The findings suggest that firm performance is statistically indistinguishable from performance in non-business domains such as politics, games, sports, and pageants. This paper extends these findings, developing the statistical foundations for a general theory of competitive dominance. The paper presents a Gibrat-based null hypothesis, develops a decomposable index of competitive dominance, and suggests statistical procedures and empirical methods for future research.
In a recent paper, Powell ([2003]) studied 20-year performance in 21 industries, using an ordinal performance measure (wins), and the Gini coefficient as a measure of competitive dominance. The findings suggest that firm performance is statistically indistinguishable from performance in non-business domains such as politics, games, sports, and pageants. This paper extends these findings, developing the statistical foundations for a general theory of competitive dominance. The paper presents a Gibrat-based null hypothesis, develops a decomposable index of competitive dominance, and suggests statistical procedures and empirical methods for future research.
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