BUSINESS EFFECT VERSUS INDUSTRY EFFECT.
AN EMPIRICAL STUDY IN GALICIAN AND PORTUGUESE FIRMS

Susana Iglesias Antelo
Universidade da Coruña

Vicente A. López López

Universidade de Santiago de Compostela

Marcos Rodríguez Rey

Xunta de Galicia

Received: 2 june 2006
Accepted: 19 december 2006

Abstract: This work is a contribution to the analysis of the influence that industry and business factors have on the variability of the organizational performance. A linear hierarchical model with fixed effects is applied to a sample of Spanish and Portuguese firms. The results show that the portion of such variability explained by the business factor is at least five times greater than that explained by the industry factor. These results, in favour of the business effect, are similar to other obtained in previous empirical studies.
Keywords: Business effect / Industry effect / Organizational performance / Competitive advantage.