Changes in Persistence of Performance Over Time

Abstract

One of the central puzzles of strategy is the persistence of superior performance. About a decade ago a stream of research emerged looking at changing persistence over time and finding a monotonic trend toward a new “age of temporary advantage”. We extend the time series from these analyses and introduce new tools from the literatures on social mobility and economic growth. We find that the trend reversed itself and the beginning of the 21st century has been characterized by increasing persistence of superior performance. This trend is not due to changes in industry composition or newly public listings. Instead we report this reversal both within and across industries and primarily within established firms.