On 21 December 2005, the Director of the Foundation and Professor Antonio Javier Revilla Torrejón signed a research agreement with the aim of carrying out the aforementioned work.
A central area of research in strategic management is the study of the determinants of business performance. The interest in properly understanding these determinants is not only of obvious relevance for business practice, but also, to a large extent, characterises business management in comparison to other disciplines of economic science. It is therefore not surprising that the main theoretical schools of strategic management have been primarily concerned with this issue.
Most of the work that has been done takes a static time perspective, looking at what factors explain differences in outcomes. But much less is known about how these factors emerge and develop. A better understanding of this problem requires studying not only performance levels but also their temporal dynamics. It is in this vein that this research is embedded, within which three parts can be clearly distinguished: first, an evolutionary model of corporate performance, whereby the present competitive position of the firm is explained in terms of two factors: on the one hand, the persistence of the company's initial conditions at a given point in the past; on the other hand, the processes of change that these conditions have undergone over time.
Second, the empirical test. On the basis of the evolutionary model, two different approaches to entrepreneurial behaviour and profits are empirically tested: first, according to the prescriptions derived from the resource-based approach, the firm's endowment of intangible resources is considered to have a positive and sustained impact on its long-term performance; on the other hand, hypotheses based on what has been called the "Austrian school of strategy", mainly based on Israel Kirzner's work on competition and entrepreneurship, are tested.
And, thirdly, the effects of the dynamism of the competitive environment on the outcome of the innovative efforts made by the firm. We study how the instability of the environment affects not only the average productivity of R&D expenditure, but also the effect of certain characteristics of the firm on this productivity. It also shows how in environments that are not very dynamic, large firms can enjoy an innovative advantage, which progressively shifts towards smaller firms as competitive dynamism increases.
The models proposed in the research are empirically tested on a large sample of Spanish manufacturing firms, including information from a variety of industrial sectors between 1991 and 2002. The data for the analyses have been obtained from the Survey on Business Strategies, which is carried out annually by the SEPI Foundation.
