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Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry

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  • Anil Nair
  • Larry Filer

Abstract

This paper uses cointegration analysis to study the competitive interaction among firms within the integrated and minimill groups in the Japanese steel industry. The use of cointegration analysis overcomes some of the limitations associated with prior attempts at modeling firm behavior within groups, and allows us to model strategies that take considerable time to adjust. Results indicate that several strategies displayed slow adjustment characteristics. All of the strategies that displayed these properties were cointegrated within the group. Finally, over the long run, the rate of strategic response to ‘shocks’ in the system varied across members and strategies: some converged, while others diverged from the group relationship. We conclude by discussing the relevance of our findings to research on strategic groups and competitive dynamics among firms. Thus the paper contributes to the literature on strategic groups and competitive dynamics, and illustrates the use of cointegration analyses to study the competitive behavior of firms. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • Anil Nair & Larry Filer, 2003. "Cointegration of firm strategies within groups: a long‐run analysis of firm behavior in the Japanese steel industry," Strategic Management Journal, Wiley Blackwell, vol. 24(2), pages 145-159, February.
    • Handle: RePEc:bla:stratm:v:24:y:2003:i:2:p:145-159
    DOI: 10.1002/smj.286
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    1. Santos, Alexandre Borges & Sproesser, Renato Luiz & Batalha, Mário Otávio, 2018. "Exploring strategic characteristics of intermodal grain terminals: Empirical evidence from Brazil," Journal of Transport Geography, Elsevier, vol. 66(C), pages 259-267.
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    3. Yamakawa, Yasuhiro & Yang, Haibin & Lin, Zhiang (John), 2011. "Exploration versus exploitation in alliance portfolio: Performance implications of organizational, strategic, and environmental fit," Research Policy, Elsevier, vol. 40(2), pages 287-296, March.
    4. Jaeyoung Cho & Jangwoo Lee, 2018. "Internationalization and performance of Korean SMEs: the moderating role of competitive strategy," Asian Business & Management, Palgrave Macmillan, vol. 17(2), pages 140-166, April.
    5. Cucagna, Maria Emilia & Goldsmith, Peter D., 2018. "Value Adding in the Agri-Food Value Chain," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(3), February.
    6. Sun, Wenbin & Price, Joseph & Ding, Yuan, 2019. "The longitudinal effects of internationalization on firm performance: The moderating role of marketing capability," Journal of Business Research, Elsevier, vol. 95(C), pages 326-337.
    7. van der Heijden, Hans & Garn, Wolfgang, 2013. "Profitability in the car industry: New measures for estimating targets and target directions," European Journal of Operational Research, Elsevier, vol. 225(3), pages 420-428.
    8. Shun-Jen Hsueh & Hsin-Hong Kang, 2007. "Cointegration relationships of strategy variables among firms within strategic groups," Asia Pacific Journal of Management, Springer, vol. 24(1), pages 61-73, March.
    9. Peter Ebbes & Rajdeep Grewal & Wayne DeSarbo, 2010. "Modeling strategic group dynamics: A hidden Markov approach," Quantitative Marketing and Economics (QME), Springer, vol. 8(2), pages 241-274, June.
    10. Shufeng Simon Xiao & Yong Kyu Lew & Byung Il Park, 2019. "‘2R-Based View’ on the Internationalization of Service MNEs from Emerging Economies: Evidence from China," Management International Review, Springer, vol. 59(4), pages 643-673, August.
    11. Gao, Lan & Liu, Xiaohui & Zou, Huan, 2013. "The role of human mobility in promoting Chinese outward FDI: A neglected factor?," International Business Review, Elsevier, vol. 22(2), pages 437-449.
    12. Balsam, Steven & Fernando, Guy D. & Tripathy, Arindam, 2011. "The impact of firm strategy on performance measures used in executive compensation," Journal of Business Research, Elsevier, vol. 64(2), pages 187-193, February.
    13. Fernando, Guy D. & Schneible, Richard A. & Tripathy, Arindam, 2016. "Firm strategy and market reaction to earnings," Advances in accounting, Elsevier, vol. 33(C), pages 20-34.
    14. Nair, Anil & Selover, David D., 2012. "A study of competitive dynamics," Journal of Business Research, Elsevier, vol. 65(3), pages 355-361.
    15. Guktae Kim & Moon-Goo Huh, 2015. "Exploration and organizational longevity: The moderating role of strategy and environment," Asia Pacific Journal of Management, Springer, vol. 32(2), pages 389-414, June.
    16. Chen, Yi-Min & Ni, Yu-Ting & Liu, Hsin-Hsien & Teng, Ying-Maw, 2015. "Information- and rivalry-based perspectives on reactive patent litigation strategy," Journal of Business Research, Elsevier, vol. 68(4), pages 788-792.

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