foundation for competitive advantage. In this view, firm performance is primarily determined by industry-level factors like market share, entry barriers into the industry, and relative cost positions (Schmalensee, 1988 )and( rumelt et al., 1991) provide surveys of this view The"firm view'offers a different explanation of performance heterogeneity. It has many variants An important one is the resource-based view(e.g,(Amit et aL., 1993), Barney et al., 1986),(Cool et al. 1989),(Penrose, 1959),(Rumelt, 1984),(Teece, 1980),(Wernerfelt, 1984). Firms can produce sustained superior performance if they have valuable, scarce, inimitable, non-substitutable factor access or capabilities. Other variants include dynamic theories consistent with the firm view, such as those on organizational population and evolutionary economics by(hannan et al, 1992)and(Nelson et al, 1982) and the dynamic capabilities perspective by(Teece et al., 1997) The empirical literature focuses on disentangling the industry and firm explanations of performance heterogeneity.(Schmalensee, 1985), using 1975 data on lines of businesses, reports that industry explains 20% of return on assets(ROA) heterogeneity, while firm-using market share as a proxy - has negligible explanatory power. However, his study leaves 80% of performance variance unexplained. Partly driven by the large unexplained variance, (Rumelt, 1991)uses four years of FTC(Federal Trade Commission) data and a composite measure of firm effects. Unlike Schmalensee, he reports that firm(business unit) effects account for 34 to 46% of explained Roa heterogeneity while industry effects account for only 8 to 18%, of which about half of this is transient, as measured by the interaction of industry effects with year effects. Rumelt also includes a corporate-parent effect and finds that it is negligible. This is interpreted as consistent with the firm view: corporate strategy that structures industry and positions a firm within that industry, does not matter(e.g ,( Carroll, 1993)( Ghemawat et al., 1993),(Hoskisson, 1993) Rumelt's paper leads to a stream of others that focus on the robustness of his findings. -e. g (Bowman et al., 2001), (Brush et al., 1997),( Chang et al., 2000), (McGahan et al., 1997), and ( roquebert et al, 1996). Recent papers agree that firm effects dominate industry effects(e. g, (Agrawal et al., 1991), (Amit et al., 2001), Lubatkin et al., 2001),(Mauri et al., 1998), (McNamara et al., 2003),(Powell, 1996)3 foundation for competitive advantage. In this view, firm performance is primarily determined by industry-level factors like market share, entry barriers into the industry, and relative cost positions. (Schmalensee, 1988) and (Rumelt et al., 1991) provide surveys of this view. The “firm view” offers a different explanation of performance heterogeneity. It has many variants. An important one is the resource-based view (e.g., (Amit et al., 1993), (Barney et al., 1986), (Cool et al., 1989), (Penrose, 1959), (Rumelt, 1984), (Teece, 1980), (Wernerfelt, 1984)). Firms can produce sustained superior performance if they have valuable, scarce, inimitable, non-substitutable factor access or capabilities. Other variants include dynamic theories consistent with the firm view, such as those on organizational population and evolutionary economics by (Hannan et al., 1992) and (Nelson et al., 1982), and the dynamic capabilities perspective by (Teece et al., 1997). The empirical literature focuses on disentangling the industry and firm explanations of performance heterogeneity. (Schmalensee, 1985), using 1975 data on lines of businesses, reports that industry explains 20% of return on assets (ROA) heterogeneity, while firm – using market share as a proxy – has negligible explanatory power. However, his study leaves 80% of performance variance unexplained. Partly driven by the large unexplained variance, (Rumelt, 1991) uses four years of FTC (Federal Trade Commission) data and a composite measure of firm effects. Unlike Schmalensee, he reports that firm (business unit) effects account for 34 to 46% of explained ROA heterogeneity while industry effects account for only 8 to 18%, of which about half of this is transient, as measured by the interaction of industry effects with year effects. Rumelt also includes a corporate-parent effect and finds that it is negligible. This is interpreted as consistent with the firm view: corporate strategy that structures industry and positions a firm within that industry, does not matter (e.g., (Carroll, 1993) (Ghemawat et al., 1993), (Hoskisson, 1993)). Rumelt’s paper leads to a stream of others that focus on the robustness of his findings. – e.g., (Bowman et al., 2001), (Brush et al., 1997), (Chang et al., 2000), (McGahan et al., 1997), and (Roquebert et al., 1996). Recent papers agree that firm effects dominate industry effects (e.g., (Agrawal et al., 1991), (Amit et al., 2001), (Lubatkin et al., 2001), (Mauri et al., 1998), (McNamara et al., 2003), (Powell, 1996)