An Investigation of Customer Accounting Systems as a Source of Sustainable Competitive Advantage

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Abstract

This study examines whether using customer accounting systems for resource allocation purposes is a source of sustainable competitive advantage. Based on a longitudinal data set comparing the performance of firms that adopt customer accounting and their industry benchmarks, we find that financial performance increases post adoption, leading to significant abnormal positive performance vis-à-vis average industry benchmarks (4–5%-points ROA difference) in the first two years following the adoption. However, we also show that this effect deteriorates over time, suggesting that the adoption of management accounting systems is a source of temporary rather than sustainable competitive advantage. The results are robust to other strategic events around the time of adoption, different matching of peers, and the influence of other factors that could be expected to influence firm performance. We discuss the implications of these findings for management accounting research and practice.
Original languageEnglish
Book seriesAdvances in Accounting
Volume32
Pages (from-to)18–30
Number of pages13
ISSN0882-6110
DOIs
Publication statusPublished - Mar 2016

Keywords

  • Customer accounting
  • Management accounting systems
  • Sustainable competitive advantage
  • Dynamic capabilities
  • Performance

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