CONTROLLING FOR OBSERVED AND UNOBSERVED MANAGERIAL SKILLS IN DETERMINING FIRST-MOVER MARKET SHARE ADVANTAGES

Empirical research on pioneering advantage establishes a strong associ ation between pioneering and market share. Researchers, however, sugge st that managerial skills may account for the relationship and undersc ore the need to control for such skills. The authors develop efficienc y measures to represent a firm's managerial skills, employing the data envelopment analysis framework as well as a regression-based approach . Furthermore, they account for unobserved, firm-specific factors that include unobserved managerial skills. With such systematic control fo r observed and unobserved managerial skills, they reexamine the impact of pioneering on market share and find that it is robust even after t hey control for managerial skills.