Appendix B. Using the Stock Market as an Indicator of Performance
Recent analysts of sustained competitive advantage (SCA) in the strategic management literature increasingly rely on the stock market as a measure.[1] Geoffrey Moore goes so far as to say that the stock market is nothing more than an “information system about competitive advantage.” He holds that investments in companies are based on the extent to which they are able to achieve competitive advantage, and that capital flows to firms that have competitive advantage and moves from firms that do not have it.[2]
But how good is the stock market as a measure? It is only one of two main indicators that typically are used to analyze corporate performance. Though companies have economic, ...
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