| Received strategic management theory includes the concept of sustained competitive advantage. In the resource-based view of the firm, as well as in the competitive models developed from industrial organization economics, it is theorized that firms seek and find sources of competitive advantage, and use them to create economic rents (above-normal profits). When such competitive advantages can be sustained over time, firms can enjoy streams of above-normal profits, or persistent superior economic performance.;This dissertation examines the theories regarding competitive advantage and frames hypotheses of firm and industry behaviors based on these theories, then investigates (1) whether evidence of persistent superior economic performance exists, (2) the time frames involved in the persistence, (3) the stability of the persistence, (4) the effects of hypercompetition, and then (5) whether efficiency is an explanation for the persistence of superior economic performance.;To empirically examine the question and test the hypotheses, data on firm profitability were collected over 20 years on the office equipment and computing machinery industry, the auto parts and accessories industry, and the Fortune 500 largest industrial firms. The data were stratified by levels of performance using a new methodology, the Ruefli-Wiggins stratification technique, and then analyzed with Discriminant Function Analysis, Ordinal Time Series Analysis, and Data Envelopment Analysis to determine that (1) some firms do exhibit persistent superior economic performance, (2) superior economic performance persists for long time frames relatively rarely, (3) the above-average performing strata are not stable over time, (4) no effects of hypercompetition are found in these samples, and (5) there is a relationship between efficiency and persistent performance.;The results of this research are consonant with the resource-based view of the firm and organizational economics, and are in conflict with neoclassical, industrial organization, Austrian, and evolutionary economics as well as the strategic management theories that draw upon these branches of economics. Further research is indicated to examine the effects of hypercompetition and the relationship between efficiency and performance. |
