Does group membership matter? Evidence from the Japanese steel industry

Abstract In this study we address criticism that performance differences among strategic groups found in past research may be spurious and attributable to firm effects. The Japanese steel industry provides the setting for the study. Our analysis is based on data from the carbon steel sector of the Japanese steel industry for the periods 1980–87 and 1988–93. A one‐way ANOVA indicated that the average performance of firms in the two technology‐based groups in this industry—the integrated mills and the minimills—were significantly different during the two periods. Subsequently, we performed a regression analysis to examine the residual group effect after controlling for both environment and firm‐specific effects. We found that even after controlling for both environment and firm‐specific effects group membership was significantly associated with firm performance. Copyright © 2001 John Wiley & Sons, Ltd.