Strategic Group Analysis in the Public Accounting Industry

• In Event: Audit Profession

Abstract

We examine the relationship between human resources and performance in public accounting firms through the lens of strategic group theory. Using a unique hand-collected panel of data for South Korean public accounting firms, we find proportion of certified public accountants, average personnel costs, and leveraging of partner time are determinants of performance. We identify public accounting strategic groups following a resource-based framework and document that human resource strategies vary across strategic groups. We find that both differences across groups and deviations from group norms explain performance, but deviating from group norms only bears fruit when competitors cannot easily emulate the resource. Our findings highlight the importance of considering strategic groups to analyze the public accounting industry.

Authors

• Keval U Amin, Stony Brook University

• Rajiv Banker, Temple University

• Seok Young Lee, Sungshin Women's University