Influence Of Industry Variables On Firm Performance

The reasons of performance differences among firms have been the debating center of industry economics and strategy management theory. Industry economics regard industry structure as the central determinant of firm performance while the resource-based theory of strategy management theory insists that firm performance is determined by unique organizational process. This paper examines the importance of industry variables on the performance of Chinese firms based on the questionnaires to business people. The results indicate that industry account for 11.8% of overall financial performance variance,16.3% of profitability variance and 23.2 sales growth variance. This research supports precursor's conclusions, makes the previous research conclusions more reliable when applying to other countries apart from developed countries and substantiates strategy management research of the company level.