2001/07/31 by Thomas C. Powell · 2 citations
Business, Management and Accounting · #Innovation and Knowledge Management #Business Strategy and Innovation #Management and Organizational Studies
paper · pdf · doi:10.1002/smj.173
openalex publication_date 2001/07/31 · openalex created_date 2025/10/10 · openalex updated_date 2026/06/04
Abstract Strategic management theories invoke the concept of competitive advantage to explain firm performance, and empirical research investigates competitive advantage and describes how it operates. But as a performance hypothesis, competitive advantage has received surprisingly little formal justification, particularly in light of its centrality in strategy research and practice. As it happens, the core hypothesis—that competitive advantage produces sustained superior performance—finds little support in formal deductive or inductive inference, and the leading theories of competitive advantage incorporate refutation barriers that preclude meaningful empirical tests. This article explores the logical and philosophical foundations of the competitive advantage hypothesis, locating its philosophical foundations in the epistemologies of Bayesian induction, abductive inference and an instrumentalist, pragmatic philosophy of science. Copyright © 2001 John Wiley & Sons, Ltd.