Mission Power and Firm Financial Performance

We estimate the effect of the mission statement on firm financial performance. The mission power, a latent construct, is included in a structural equation model to compute its impact across two channels: the profit margin and the assets turnover. Our estimates, based on a sample of Colombian companies, show that the non-significant impact of mission statement documented in the literature may be caused by the opposite effect that the amount of sales induces on both channels. We disentangle both effects and show that the effect on assets turnover dominates when mission statement compels good assets management practices.