Glue or Gasoline? The Role of Interorganizational Linkages in the Occurrence and Spillover of Competitive Wars

Yu, Tieying; Guo, Wei; Gimeno, Javier

doi:10.5465/amj.2019.0525

Cited by 3 publications

(5 citation statements)

References 114 publications

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“…When relational embeddedness transpires between the firm and its partner, competitive tension may become detrimental given the sense of betrayal and the perception of the partner as an emerging rival (Kilduff, 2019). Indeed, relational embeddedness may restrict competitive interaction between the firm and its partner, but once a competitive action is taken by the partner, such as acquiring a target with a business similar to that of the firm, their embeddedness can facilitate a competitive war, “adding gasoline to the fire” (Yu, Guo, Gimeno, & Zhang, in press). Moreover, in an embedded relationship, the firm tends to share tacit knowledge and proprietary assets with its partner, which can endanger its competitive position if these assets find their way to a competitor.…”

Section: Discussionmentioning

confidence: 99%

How does a partner's acquisition affect the value of the firm's alliance with that partner?

Lavie

Lunnan

Truong

2022

Strategic Management Journal

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Research Summary How does an acquisition initiated by a firm's alliance partner affect the value that the firm can create and capture from its alliance with that partner? We conjecture that the similarity between the businesses of the firm and its partner's acquisition target restricts the firm's ability to create and capture value from its alliance, whereas the complementarity between their businesses enhances the firm's gain from its alliance. We further expect relational embeddedness between the firm and its partner to mitigate the competitive tension associated with similarity while reinforcing synergies ascribed to complementarity. Our analysis of 361 firms and their 590 alliances with 91 partners that acquired 164 targets during 2000–2016 supports our predictions about business similarity and complementarity but refutes those concerning relational embeddedness. Managerial Summary When a firm's partner engages in an acquisition, this can impact the value of their alliance. We show that when the acquired target competes with the firm, the value of the alliance declines. In turn, when the target and firm's businesses are complementary, the alliance creates more value. We also find that when the firm and the partner had extensive experience working together, this reinforces the negative effect of business similarity with the target, probably because of perceived betrayal and knowledge leakage. Joint experience also reduces the value of complementarity, likely due to the difficulty of modifying collaborative practices. We encourage managers to scrutinize their partners' corporate initiatives, reduce commitment when the partner acquires a competing target, and leverage new complementarities following the partner's acquisitions.

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Section: Discussionmentioning

confidence: 99%

How does a partner's acquisition affect the value of the firm's alliance with that partner?

Lavie

Lunnan

Truong

2022

Strategic Management Journal

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“…Our investigation of innovation ambidexterity provides an integrated picture of how competitive relationships affect firm innovation. Firms embedded in small-world clusters face competitors that are more stable and less diverse [ 10 ], and the repeated interactions between those firms facilitate information transfer [ 17 ]. These factors make firms more sensitive to the dynamics of their rivals and, thus, take faster actions to respond.…”

Section: Discussionmentioning

confidence: 99%

“…This is because a dense competition network can reduce the diversity of competitors [ 10 ] and enable the competitors to act more interdependently and in a similar fashion [ 23 ]. Repeated interactions can facilitate knowledge exchange and resource sharing [ 17 ], leading to the promotion of mutual trust and alignment of interests among competitors [ 24 , 57 ]. Consequently, focal firms in small-world clusters are more sensitive to their competitors’ technological dynamics and act more rapidly in response to others’ actions at a lower cost.…”

Section: Hypothesesmentioning

confidence: 99%

“…Therefore, a favorable position in a competition network is especially crucial for a firm’s innovation activities. In the study of how competitive network structure affects firm performance, relevant findings include that the size of a competition network can increase the firm’s product market entry [ 10 ], the competitive density and strength affect the firm’s technology competitive capability differently [ 16 ], inter-organizational linkages reduce the likelihood of competitive war [ 17 ], and the position of brokerage in the domestic technology competition network can facilitate the firm to join related international strategic alliances [ 15 ]. Although these studies have extended our understanding of the competition network structure, several essential research gaps remain to be explored further: Many studies treat competitors in a competition network equally by measuring the intensity of competition by the number of competitors.…”

Section: Introductionmentioning

confidence: 99%

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Competitor-Weighted Centrality and Small-World Clusters in Competition Networks on Firms’ Innovation Ambidexterity: Evidence from the Wind Energy Industry

Zhao

Zhang

et al. 2023

IJERPH

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A firm’s embedding structures in a technology competition network can influence its propensity for innovation ambidexterity. Using PCT (patent cooperation treaty) patent data of wind energy companies between 2010 and 2019, we adopted social network analysis and fixed-effects panel negative binomial regression to examine the impacts of network structural features on firm innovation ambidexterity. The results show that competitor-weighted centrality contributes to a firm’s propensities for both incremental and radical green innovation. In contrast, a firm’s embeddedness in small-world clusters can moderate the effect of the firm’s competitor-weighted centrality positively on its incremental innovation but negatively on its radical innovation. The study makes three theoretical contributions. First, it enriches the understanding of how the competition network affects innovation ambidexterity. Second, it provides new insights into the relationship between competition network structures and technology innovation strategy. Finally, it contributes to bridging the research on the social embeddedness perspective and green innovation literature. The findings of this study have important implications for enterprises in the wind energy sector regarding how competitive relationships affect green technology innovation. The study underscores the importance of considering the competitiveness of a firm’s rivals and the embedded structural features when devising green innovation strategies.

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“…An additional source to grant legitimacy to the short-term rental market are investors and financial analysts as they represent two key stock market actors affecting publicly traded firms (Yu et al, 2020). Investors are entities that trade in the shares of a firm whereby the collective sum of investor actions changes stock prices.…”

Section: Legitimation From the Stock Marketmentioning

confidence: 99%

Disruptor Recognition and Market Value of Incumbent Firms: Airbnb and the Lodging Industry

Bianco

Zach

Singal

2022

Journal of Hospitality & Tourism Research

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Although Airbnb debuted in 2008, incumbent lodging firms did not fully recognize it as a legitimate competitor for several years. However, as Airbnb made inroads into the accommodation business, hotel firms and their investors started to take notice and to legitimize its disruptive role. In this paper, we investigate investors’ awareness of the disruptor Airbnb as a competitor of incumbent lodging firms. Specifically, we assess the effect of awareness on incumbent hotel management and hotel property owner firms. Employing an event study methodology, our analysis finds that Airbnb performance milestones negatively affect incumbents’ market value. This research contributes to our understanding of the role played by investors and financial analysts in shaping competitive markets by legitimizing an industry disruptor and by spurring competitive action among incumbent firms.

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Glue or Gasoline? The Role of Interorganizational Linkages in the Occurrence and Spillover of Competitive Wars

Cited by 3 publications

References 114 publications

How does a partner's acquisition affect the value of the firm's alliance with that partner?

How does a partner's acquisition affect the value of the firm's alliance with that partner?

Competitor-Weighted Centrality and Small-World Clusters in Competition Networks on Firms’ Innovation Ambidexterity: Evidence from the Wind Energy Industry

Disruptor Recognition and Market Value of Incumbent Firms: Airbnb and the Lodging Industry

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