Is The Relationship Between Market Share and Business Profitability Spurious?: An Empirical Assessment.

This study examined the nature of this relationship across a taxonomy of homogeneous environments

John E. Prescott

2011

Scholarcy highlights

  • While previous research on the relationship between market share and business profitability has found a positive relationship, its nature and its context-specificity have not been adequately addressed
  • This study examined the nature of this relationship across a taxonomy of homogeneous environments
  • The major findings are that the association between MS and BP was context-specific; and both direct and spurious relationship were observed with their relative strengths varying across environments
  • Key firm conduct variables accounting for the spuriousness were identified
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