Performance effects

Strategy researchers want to understand differences in firm performance.

can be written as:[4] Other performance effects include the chief executive officer and geographical region or country.

An upside of this measure is that the standard deviation relates to linear distances so effects are not similarly amplified or shrunk.

Because the sum of squares measure does not account for degrees of freedom, it is sensitive to sample dimensions.

[3] For example, sampling more businesses in the same number of industries will change the ratio of sum of squares due to industry and sum of squares due to business.

(2018 Award Recipient of The Dan and Mary Lou Schendel Best Paper Prize)