This paper provides
empirical evidence that business model change significantly enhances firm
productivity. Using a global panel dataset of over 18,000 companies across
multiple industries from 2009 to 2023, the study quantifies the impact of
business model reinvention, proxied by changes in the Net Asset Turnover (NAT)
ratio. The analysis employs both fixed-effects regression and instrumental
variable approaches to address endogeneity concerns. Results show that firms in
the top quartile of business model change outperform laggards by 1.5% to 8.5%,
and that doubling the pace of change can increase Total Factor Productivity
(TFP) by up to 36.7%. Sectoral analysis reveals variation in impact, with the
strongest effects in wholesale, mining, and business services. The study
highlights the growing importance of strategic adaptability in response to
technological, regulatory, and market shifts.
