Concentration of rivals’ actions and competitive reaction

Kai Yu Hsieh, Eunjung Hyun

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Purpose: The purpose of this paper is to explore how managers’ evaluation of and reaction to multiple rivals’ actions will be affected by the distributional characteristics of these actions, including the extent to which rivals’ actions are centered on certain firms (actor concentration), concentrated in certain time periods (temporal concentration), and clustered in certain geographic locations (spatial concentration). Design/methodology/approach: The analyses are based on panel data on Taiwanese producers of personal computers and peripherals and the investments they made in mainland China after the Asian financial crisis. The authors employ fixed-effect logit regression to test the hypotheses. Findings: Rivals’ recent actions in China increase a focal firm’s inclination to act especially when these rivals’ actions are characterized by a high level of actor, temporal, and/or spatial concentration. Originality/value: The analytical approach goes beyond a dyad-level conceptualization of interfirm rivalry. Incorporating insights from behavioral decision making, the paper shows how a firm with limited attentive capacity reacts to the aggregate impact of multiple rivals’ actions.

Original languageEnglish
Pages (from-to)2188-2207
Number of pages20
JournalManagement Decision
Volume54
Issue number9
DOIs
Publication statusPublished - 2016

Keywords

  • Behavioural decision making
  • Interaction with multiple rivals
  • Strategy research on competitive dynamics

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Management Science and Operations Research

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