Measuring Long Term Superior Performance: The UK's Long-Term Superior Performers 1984–2003

This article examines the issue of determining long-term sustained superior financial performance. We demonstrate that the technique of frontier analysis is a robust and theoretically consistent way to identify relative performance. We show how our approach, although dependent on the reliability of reported financial data (which recent events show needed to be treated with caution for some companies), addresses the three critical issues in the measurement of performance: balancing short-term and long-term performance, capturing the multidimensional nature of performance, and finding the right peer comparators. The approach is particularly important today, given the failure of past performance to signal in any way how firms would be able to weather a pervasive global crisis.