An empirical study of business effect and industry effect in Galicia

Abstract

This work is a contribution to the analysis of the influence that industry and business factors have on the variability of the organizational performance. A linear hierarchical model with fixed effects is applied to a sample of Galician firms. The results show that the portion of such variability explained by the business factor is clearly greater than that explained by the industry factor. These results, in favour of the business effect, are similar to other obtained in previous empirical studies.