Inferring Superior Capabilities from Sustained Superior Performance: A Bayesian Analysis

Strategic Management Journal, Forthcoming

41 Pages Posted: 18 Aug 2011 Last revised: 5 Apr 2013

See all articles by Jerker Denrell

Jerker Denrell

Independent

Christina Fang

New York University (NYU) - Department of Management and Organizational Behavior

Zhanyun Zhao

Mathematica Policy Research, Inc.

Date Written: August 17, 2011

Abstract

To what extent can one infer that superior capabilities are driving sustained superior performance? Modeling performance as some combination of differences in capabilities and processes of cumulative advantage, we argue that a Bayesian framework in which decision makers take into account the differences in cumulative advantage provides for a correct inference. We show, using both simulated and real performance data, that the Bayesian method gives rise to estimates relevant for the inference problem. The estimates also illustrate why a firm with superior performance during a longer period can be less likely to possess superior capabilities than a firm with superior performance during a shorter period. Our work has implications for the origins of competitive advantages and for organization learning in strategy research.

Keywords: Superior Performance, Competitive Advantage, RBV, Bayesian Analysis

Suggested Citation

Denrell, Jerker and Fang, Christina and Zhao, Zhanyun, Inferring Superior Capabilities from Sustained Superior Performance: A Bayesian Analysis (August 17, 2011). Strategic Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1911300

Jerker Denrell

Independent

No Address Available

Christina Fang (Contact Author)

New York University (NYU) - Department of Management and Organizational Behavior ( email )

44 West 4th Street
New York, NY 10012
United States

Zhanyun Zhao

Mathematica Policy Research, Inc. ( email )

P.O. Box 2393
Princeton, NJ 08543-2393
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
218
rank
137,589
Abstract Views
1,048
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information