A System Dynamics Approach for Assessing Business Competitiveness

25 Pages Posted: 5 Jan 2017

See all articles by Esteban Lafuente

Esteban Lafuente

Universitat Politecnica de Catalunya (UPC Barcelona Tech)

László Szerb

University of Pécs

András Rideg

University of Pécs

Date Written: September 2016

Abstract

The analysis of the interconnectedness between resources and capabilities, and the way organizations use them as competitive weapons have become a central element of the strategic management literature. Drawing on the resource-based view and the configuration theory, this study proposes a multidimensional competitiveness index formed by ten competitive pillars that incorporates system dynamics in the analysis. Using a unique sample of 625 Hungarian small and medium-sized firms, we empirically illustrate how the proposed index functions for managerial decision-making. Results show that the impact of competitiveness-enhancing strategies is conditional on the configuration of the businesses’ system of competencies. Low-competitive businesses benefit more from investments in the weakest competitive pillar, while strategies oriented to improve more than one competitive pillar yield higher competitiveness improvements among high-competitive businesses.

Keywords: Competitiveness, resource-based view, system dynamics, small business

JEL Classification: L25, L19

Suggested Citation

Lafuente, Esteban and Szerb, Laszlo and Rideg, András, A System Dynamics Approach for Assessing Business Competitiveness (September 2016). Available at SSRN: https://ssrn.com/abstract=2892221 or http://dx.doi.org/10.2139/ssrn.2892221

Esteban Lafuente (Contact Author)

Universitat Politecnica de Catalunya (UPC Barcelona Tech) ( email )

Barcelona, Barcelona
Spain

Laszlo Szerb

University of Pécs ( email )

Rákóczi st. 80
Pécs, 7622
Hungary

HOME PAGE: http://ktk.pte.hu/en/department-quantitative-management/laszlo-szerb

András Rideg

University of Pécs ( email )

Rákóczi út 80
Pécs, 7622
Hungary

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