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The purpose of this paper is to evaluate which strategic resources or industry structural conditions help firms build up a competitive advantage and sustain it over time.

Our approach is based on one main variable. Firm‐specific profits (proxy for competitive advantage) were estimated as the difference between a firm's profits and the average profitability of its industry. From it, two measures of firm performance were estimated, the firm‐specific projected profitability (FSPP) and the persistence of firm‐specific profits (FSPPe) which were used two split the sample in two type of firms, out performers and underperformers.

The results suggested that FSPPe and FSPP are two different indicators of firms' performance and may not be influenced by the same factors. The results show that neither the FSPPe nor its sustainability is explained through strategic resources.

While intangible investments might help firms build up a competitive advantage, these might not help to preserve it.

Further examination on unobserved strategic factors should help gain better understandings of what makes out performers earn/sustain higher level of profits over time.

Investments on certain strategic resources above industry average can lock firms into persistent competitive disadvantages.

This study aims to investigate how the intangible intensive nature of firms affects the value relevance of earnings and the book value of equity between profit- and loss-reporting firms. The study also examines how firms’ intangible intensity affects the value relevance of R&D outlays between profit- and loss-reporting firms.

An empirical analysis based on Ohlson’s (1995) framework is used. A total of 54,421 firm-year observations of Indian listed firms from financial years 1992–2016 constitute the study sample.

The findings suggest that the difference in the value relevance of earnings and the book value of equity between profit- and loss-reporting firms is more significant in non-intangible intensive firms than in intangible firms. Specifically, earnings are more value relevant in profit-reporting and non-intangible intensive firms, whereas book value of equity is more value relevant in loss-reporting and intangible intensive firms. The results also suggest that the difference in the incremental value relevance of R&D information between profit- and loss-making firms is higher in intangible intensive firms than in non-intangible intensive firms.

The findings of this study can help managers, standard-setters and investors make effective decisions.

This study offers insights into the impact of intangible intensity on the value relevance of aggregated and disaggregated accounting information between profit- and loss-making firms in institutional settings where capitalization of R&D expenditures is allowed.

Based on consumers’ geographic real-time locations, firms can utilize mobile targeting promotion (MTP) to target consumers through some applications embedded in mobile device. This paper aims to focus on two competing firms about how to make MTP strategies under asymmetric mobile accessibilities, i.e. the proportions of consumers who can be targeted by firms through apps are different.

This paper develops a game model for two competing firms. Aiming to maximizing profit, firms should consider how to utilize MTP strategies to trade off the benefit (expand market share) and the cost (intensive price competition).

The optimal MTP strategies and equilibrium prices have been presented under different scenarios. This paper verifies that asymmetry can make the firm with high mobile accessibility obtain extra profits. Furthermore, when unit targeting cost is relatively low, profit of the firm with low mobile accessibility increases first and decreases later with respect to its mobile accessibility.

Competing firms’ optimal MTP strategies and equilibrium prices are determined not only by unit targeting cost but also by consumers’ mobile accessibilities to firms. Firms have strong incentive to enlarge the mobile accessibility to procure more profit in monopoly context, but, under competing context, a higher mobile accessibility may not mean better for firm.

This is one of the few papers which study mobile targeting based on game theory considering unit targeting cost and asymmetric mobile accessibility simultaneously.

Previous literature on earnings management (EM) indicates that managers are motivated to adjust reported income to serve their own self-interests, and to try and influence capital markets. However, previous research has failed to provide an appropriate theoretical underpinning for EM and has ignored the effect of cultural and environmental factors on shaping managers’ motivations. Therefore the purpose of this paper is to draw on interpretive methodology and new institutional sociology (NIS) theory to identify the external factors that motivate managers of Egyptian companies to use EM to modify financial statements.

The research adopted an interpretative methodology and interview methods. Interviewees were conducted with 34 participants, who were divided into four different categories; executives, financial analysts, auditors and stock exchanges’ authorities.

This paper provides empirical evidence on the range of external factors that motivate Egyptian corporate executives to adjust the earnings number in financial statements. These external factors include the expectations of investors, lenders and employees, the impact of stock exchange listing rules, beating an earnings target, and the privatisation of key state-owned companies.

The authors recognise that the paper has a number of limitations. The research is concerned solely with EM in Egypt and, therefore, it would not be safe to generalise the results to other contexts, even in the Middle East. Further research on the behaviour of managers towards EM in other countries would be useful to test validity of the results reported in this paper.

The principal contribution of this paper is to build on the previous EM literature to include external factors within the Egyptian context which motivate Egyptian managers to manage the earnings of companies in an upward direction. It adds additional EM motives to available literature including: employees, stock exchange’s rules, privatisation and meeting industrial norms. Also, the paper provides evidence of the effect of concentrated share ownership on managers’ likelihood to engage in EM behaviour. The paper also extends NIS theory to recognise the importance of the interplay between institutional and economic environment by including economic reform, and non-financial providers as factors that can explain the EM behaviour.

This purpose of this paper to examine how profit sharing depends on the underlying profitability of firms. More precisely, motivated by theoretical research on fair wages and unionized labor markets, profit sharing is estimated for six different profitability categories: positive, increasing, positive and increasing, negative, decreasing and negative or decreasing.

The paper exploits a high-quality linked employer–employee data set covering the universe of Finnish workers and firms. Endogeneity of profitability and self-selection of firms in different profitability categories are accounted for by an instrumental variables approach. The panel-structure of the data is used to control for unobserved heterogeneity (spell and individual fixed effects).

Profits are shared if firms are profitable or become more profitable. The wage-profit elasticity varies between 0.03 and 0.13 in such firms. However, profits are not shared if firms make losses or become less profitable. There is no downward wage adjustment.

Because of the instrumental variables approach the question of external validity arises. Further empirical research on profit sharing with an explicit focus on firm profitability is warranted. The results of the paper indicate a connection between rent sharing and wage rigidity, as suggested by union and fair wage theory.

This is the first paper to consistently estimate the extent of profit sharing depending on the underlying profitability of firms.

This paper seeks to deal with the problem of the anomalous negative price‐earnings relation for firms listed in the Athens Stock Exchange (ASE).

The simple earnings capitalization model is employed to investigate the association between price and earnings across profit and loss firms listed in the ASE.

This study verifies a negative price‐earnings relation for those firms that report losses (loss firms) and a positive price‐earnings relation for those firms that report profits (profit firms).

Regarding the usefulness of financial information to investors, the security price‐earnings relation is proved not to be homogeneous across firms that report losses and firms that report profits.

The paper provides evidence on the value relevance of publicly available information in a developing stock exchange which finally achieved its entrance to the world's developed markets.

Firm’s operating contexts and asymmetric perspectives of success versus failure outcomes are two essential features typically absent in research on firms’ implemented strategies. The study here describes and provides examples of formal case-based models (i.e., constructing algorithms) of firms implemented strategies within several of 81 potential context (task environments) configurations – large vs small, service vs production orientation, low vs high competitive intensity, low vs high technological turbulence, and ambiguous settings for each. The study applies the tenets of complexity theory (e.g., equifinality, causal asymmetry, and single causal insufficiency). The study proposes a meso-theory and empirical testing position for solving “the crucial problem in strategic management” (Powell, Lovallo, & Fox, 2011, p. 1370) – firm heterogeneity – why firms adopt different strategies and structures, why heterogeneity persists, and why competitors perform differently. A workable solution is to identify/describe implemented executive capability strategies that identify firms in alternative specific task environments which are consistently accurate in predicting success (or failure) of all firms for specific implemented capabilities/context configuration. The study shows how researchers can perform “statistical sameness testing” and avoid the telling weaknesses and “corrupt practices” of symmetric tests such as multiple regression analysis (Hubbard, 2015) including null hypothesis significance testing. The study includes testing the research issues using survey responses of 405 CEO and chief marketing officers in 405 Hungarian firms. The study describes algorithms indicating success cases (firms) as well as failure cases via deductive, inductive, and abductive fuzzy-set logic of capabilities in context solutions.

High-growth firms have recently received considerable attention in the firm growth literature. These firms might have grown despite the existence of growth barriers, and evidence also suggests that, having already grown exponentially, they may not be in the best position to grow further. Policies targeting high-growth firms may therefore be misdirected. We argue that entrepreneurship researchers should concentrate more on firms that are not hiring, despite having high profits. We call these firms “sleeping gazelles,” and demonstrate that they represented almost 10% of all limited liability firms in Sweden from 1997 to 2010. Nearly half of these firms continued to earn high or moderate profits in subsequent three-year periods, while still displaying no growth. Regression analyses indicate that these firms were significantly smaller, older, more likely to be active in industries with high profit uncertainty, and more likely to be located in less densely populated municipalities than were corresponding growing firms.

Variable pay, defined as pay that is tied to some measure of a firm’s output, has become more important for executives of the typical American firm. Variable pay is usually touted as a way to provide incentives to managers whose interests may not be perfectly aligned with those of owners. The incentive justification for variable pay has well-known theoretical problems and also appears to be inconsistent with much of the data. Alternative explanations are considered. One that has not received much attention, but is consistent with many of the facts, is selection. Managers and industry specialists may have information about a firm’s prospects that is unavailable to outside investors. In order to induce managers to be truthful about prospects, owners may require managers to “put their money where their mouths are,” forcing them to extract some of their compensation in the form of variable pay. The selection or sorting explanation is consistent with the low elasticities of pay to output that are commonly observed, with the fact that the elasticity is higher in small and new firms, with the fact that variable pay is more prevalent in industries with very technical production technologies, and with the fact that stock and stock options are a larger proportion of total compensation for higher level employees. The explanation fits small firms and start-ups better than larger, well-established firms.

This paper shows that consumer preference heterogeneity affects whether multinational firms serve local markets via imports or local production. Firms are least likely to choose local production over imports for product varieties that have relatively inelastic demand because transport costs have a smaller impact on the firm’s local profits for these products. The results suggest that there is complementarity between centralized production, with local market access via imports, and strategies that maintain low price elasticities at the brand level, such as advertising and within-brand product proliferation. A partial equilibrium study of the laundry detergent industry in Western Europe illustrates how firms and consumers interact at different levels of transport costs and reveals the product varieties that are most and least likely to be manufactured locally when transport costs are high.