The moderating effect of industry concentration on the relation among institutions and firm performa

We propose that industry conditions, specifically industry concentration, moderate the relation among institutions and firm performance. We built a database of 230,222 observations of 10,903 companies in 64

countries in a 23 years interval. Regressions tested the interaction between the Herfindahl-Hirschman Index (HHI) and six institutional variables, considering three dependent variables: ROA, ROE and 3-year sales growth. Two empirical strategies were used: fixed effects and hierarchical (multilevel) models. Results were significant

for the negative interaction between HHI and four variables: voice and accountability, govern effectiveness, regulatory quality and control of corruption. We argue that expansion strategies within the industry, such as market share dominance, M&A and growth strategies, may fit better on weak institutional contexts.

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The moderating effect of industry concentration on the relation among institutions and fir.

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