Analysing industry profitability: a "complexity as cause" perspective.

Caldart, Adrián A.; Oliveira, Fernando

Abstract

We investigate how the competitive complexity of an industrial sector affects its profitability. For that purpose, we developed a set of simulations representing industries as complex systems where different firms co-evolve linked by multiple competitive dimensions. We show that increases in the complexity of an industry, resulting from increases in the number of players and in the number of competitive dimensions linking them, damages industry performance. We also found that the negative impact on performance resulting from a higher number of competitive dimensions decreases as the number of players in the industry increases and that the decrease in industry performance associated to big increases in the number of players is mediated by the number of competitive dimensions linking them.

Citation

CALDART, A.A. and OLIVEIRA, F. 2010. Analysing industry profitability: a "complexity as cause" perspective. European management journal [online], 28(2), pages 95-107. Available from: https://doi.org/10.1016/j.emj.2009.04.004

• Journal Article Type: Article
• Acceptance Date: May 28, 2009
• Online Publication Date: May 28, 2009
• Publication Date: Apr 30, 2010
• Deposit Date: Oct 21, 2023
• Publicly Available Date: Nov 15, 2023
• Journal: European management journal
• Print ISSN: 0263-2373
• Electronic ISSN: 1873-5681
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 28
• Issue: 2
• Pages: 95-107
• DOI: https://doi.org/10.1016/j.emj.2009.04.004
• Keywords: Industry modelling; Competition; Complexity theory
• Public URL: https://rgu-repository.worktribe.com/output/2114776