The influence of industry characteristics and dynamic capabilities on firms’ profitability

Abstract

The aim of this research was to explore one of the most intriguing dimfirm’s business—its performance. Aside from analysing the influence of industryon the firm’s performance, the authors addressed the characteristics of dynamic their role in contribution to the firm’s ultimate success. The analysis was conducte118 small Croatian manufacturing companies. The application of the Structural Eq(SEM) approach revealed a statistically significant influence of both the industry(represented by Porter’s five forces framework) and dynamic capabilities (based oon the firm’s performance, where the influence of dynamic capabilities is proven that of the industry.