Macro‐economic risk factors in industrial markets: are e´lite firms less susceptible?

As far back as 1947, Alfred Marshall proposed that the disparity in income between those individuals with moderate ability and those with greater ability is larger than the disparity in talent. Building on Marshall’s thesis, argues that marginal differences in firm capability may result not only in increased profitability, but also in lower susceptibility to macro‐economic risk factors for basic manufacturing firms in industrial markets. The results seem to suggest that the firms with greater ability have in fact managed to combine resources in such a way as to create inimitable advantages. Specifically, through a commitment to product and process innovation and modern manufacturing facilities, the most successful firms in the study have been able to acquire key resources, and gain extensive control over the value creation process. The outcome is high relative product quality, relative pricing power, and lower susceptibility to macro‐economic risk.