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- Title
CAN SMALL FIRMS AND DEFEND STRATEGIC NICHES? A TEST OF THE PORTER HYPOTHESIS.
- Authors
Bradburd, Ralph M.; Ross, David R.
- Abstract
Abstract--A number of studies have found a positive relation between market share and profitability. Michael Porter argues that this need not hold when small firms find strategic niches protected by mobility barriers. This paper examines that hypothesis by comparing the profitability of large and small lines of business when the activities of the two groups (proxied by the allocation of sales across submarkets) differ on average. We find that in heterogeneous product mix industries profits of large LBs are no longer significantly greater than profits of smaller rivals, except that market leaders maintain their advantage regardless of product mix.
- Subjects
MARKET share; COST centers (Accounting); PROFIT; PORTER, Michael; PROFITABILITY; RENT (Economic theory); SMALL business; BUSINESS forecasting; PRODUCT mixes
- Publication
Review of Economics & Statistics, 1989, Vol 71, Issue 2, p258
- ISSN
0034-6535
- Publication type
Article
- DOI
10.2307/1926971