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Cointegration relationships of strategy variables among firms within strategic groups

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  • Shun-Jen Hsueh

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  • Hsin-Hong Kang

    ()

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    Abstract

    This study examines the long-term, dynamic equilibrium relationship for strategy variables of firms in strategic groups by conducting a cointegration analysis. Replicating the Nair and Filer (Strateg. Manage. J., 24: 145–159, 2003 ) methodology and extending it to four industries listed on the Taiwan Stock Exchange, we find that not all of non-stationary strategy variables have the cointegration relationships, and that only the strategy variables of strategic groups in our traditional industries (as compared to our high-tech industries) should have a long-term competitive equilibrium (cointegration relationship). In other words, we can proceed with an error correction model in some traditional industries to map out the relative positions of rival firm strategies and subsequently implement appropriate reactions. Copyright Springer Science+Business Media, LLC 2007

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    File URL: http://hdl.handle.net/10.1007/s10490-006-9009-0
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    Bibliographic Info

    Article provided by Springer in its journal Asia Pacific Journal of Management.

    Volume (Year): 24 (2007)
    Issue (Month): 1 (March)
    Pages: 61-73

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    Handle: RePEc:kap:asiapa:v:24:y:2007:i:1:p:61-73

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    Postal: P.O. Box 17, 3300 AA Dordrecht, the Netherlands
    Web page: http://www.springerlink.com/link.asp?id=106589

    Related research

    Keywords: Cointegration analysis; Dynamic equilibrium relationships; Error correction model; Strategy variables; Taiwan Stock Exchange;

    References

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    1. Peng, Mike W. & Zhou, Yuanyuan & York, Anne S., 2006. "Behind make or buy decisions in export strategy: A replication and extension of Trabold," Journal of World Business, Elsevier, vol. 41(3), pages 289-300, September.
    2. Mike W. Peng & Justin Tan & Tony W. Tong, 2004. "Ownership Types and Strategic Groups in an Emerging Economy," Journal of Management Studies, Wiley Blackwell, vol. 41(7), pages 1105-1129, November.
    3. Chen, M.J. & Smith, K.G. & Grimm, C.M., 1991. "Action Charasteristics As Predictors of Competitive Responses," Papers fb-_91-12, Columbia - Graduate School of Business.
    4. Osterwald-Lenum, Michael, 1992. "A Note with Quantiles of the Asymptotic Distribution of the Maximum Likelihood Cointegration Rank Test Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 461-72, August.
    5. Caloghirou, Yiannis & Protogerou, Aimilia & Spanos, Yiannis & Papagiannakis, Lefteris, 2004. "Industry-Versus Firm-specific Effects on Performance:: Contrasting SMEs and Large-sized Firms," European Management Journal, Elsevier, vol. 22(2), pages 231-243, April.
    6. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    8. Julie Li, 2005. "The Formation of Managerial Networks of Foreign Firms in China: The Effects of Strategic Orientations," Asia Pacific Journal of Management, Springer, vol. 22(4), pages 423-443, December.
    9. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
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    Cited by:
    1. Guidi, Francesco & Gupta, Rakesh, 2010. "Cointegration and conditional correlations among German and Eastern Europe equity markets," MPRA Paper 21732, University Library of Munich, Germany.

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