Measuring and Testing Industry Effects in Strategic Management Research

Abstract

The authors examine how strategy scholars have measured and tested industry effects. They report findings from three studies. First, they replicate the Dess, Ireland, and Hitt (1990) article on industry controls in strategic management research using a new sample of studies published during 2000 to 2009, finding that there has been a decrease in the proportion of articles that do not control for industry effects at all and at the same time noting a significant increase in the number of single-industry studies. Second, they employ a fine-grained content analysis of articles published in the Strategic Management Journal at three different points during the study period to identify the different ways that industry effects have been considered. Findings depict a myriad of highly diverse industry-level measures that researchers have applied. Third, they test the empirical implications of applying different measures of one particular industry characteristic, industry performance. They demonstrate that empirical findings and the interpretation of theoretical models can differ based on how industry effects are incorporated. Recommendations are offered for guiding future research about how to examine industry effects.