Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/65323 
Year of Publication: 
2002
Series/Report no.: 
SFB 373 Discussion Paper No. 2002,22
Publisher: 
Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes, Berlin
Abstract: 
Critiques of the concept of key success factors have raised objections both conceptually and methodologically. From the latter perspective, common research practice is criticized for neglecting the influence of firm-specific, unobservable variables (e.g., management skills). To control for these effects a structural equation approach (LISREL) to the analysis of panel data is proposed. In an empirical study based on the PIMS annual data base the influence of unobservables on the direct and indirect effects of product quality on profitability is examined. It is shown, how a step by step extension of a basic simultaneous equation model sheds some light on the role unobservable variables play. Even after controlling for persistent unobservable effects product quality and market share remain significant determinants of profitability.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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