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Incumbent and Entrant Rivalry in a Deregulated Industry

Author

Listed:
  • Tammy L. Madsen

    (Management Department, The Leavey School of Business, Santa Clara University, Santa Clara, California 95053)

  • Gordon Walker

    (Edwin L. Cox School of Business, Southern Methodist University, P.O. Box 750333, Dallas, Texas 75275-0333)

Abstract

This paper examines how two general cohorts of firms, entrants and incumbents, differ in their competitive intensity following price and entry deregulation in the trucking industry from 1980 to 1993. The results demonstrate that the competitive strength associated with entrants’ experience is reduced as they grow. However, organizational size dampens the positive effect of competitive experience on the exit rate more slowly for incumbents that were large at deregulation than it does for entrants. The results suggest that two types of firms exert the strongest pressure on rivals: entrants that gain experience but remain small under deregulation, and incumbents that are large but had limited prederegulation experience.

Suggested Citation

  • Tammy L. Madsen & Gordon Walker, 2007. "Incumbent and Entrant Rivalry in a Deregulated Industry," Organization Science, INFORMS, vol. 18(4), pages 667-687, August.
    • Handle: RePEc:inm:ororsc:v:18:y:2007:i:4:p:667-687
    DOI: 10.1287/orsc.1070.0262
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    References listed on IDEAS

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    Citations

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    Cited by:

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    3. Dario Maimone Ansaldo Patti & Ram Mudambi & Pietro Navarra & Daniela Baglieri, 2016. "A tale of soil and seeds: the external environment and entrepreneurial entry," Small Business Economics, Springer, vol. 47(4), pages 955-980, December.
    4. Tammy L. Madsen & Michael J. Leiblein, 2015. "What Factors Affect the Persistence of an Innovation Advantage?," Journal of Management Studies, Wiley Blackwell, vol. 52(8), pages 1097-1127, December.
    5. Rajshree Agarwal & Constance E. Helfat, 2009. "Strategic Renewal of Organizations," Organization Science, INFORMS, vol. 20(2), pages 281-293, April.
    6. Brian T. McCann & Govert Vroom, 2014. "Competitive Behavior and Nonfinancial Objectives: Entry, Exit, and Pricing Decisions in Closely Held Firms," Organization Science, INFORMS, vol. 25(4), pages 969-990, August.
    7. Reilly, Marty & Scott, Pamela Sharkey & Tippmann, Esther & Mangematin, Vincent, 2023. "Sustaining competence creation in the multinational enterprise: The role of piloting in subsidiaries," Journal of International Management, Elsevier, vol. 29(3).
    8. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & Eric Yanfei Zhao & Greg Fisher & Michael Lounsbury & Danny Miller, 2017. "Optimal distinctiveness: Broadening the interface between institutional theory and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 93-113, January.
    9. Ansari, Shahzad (Shaz) & Krop, Pieter, 2012. "Incumbent performance in the face of a radical innovation: Towards a framework for incumbent challenger dynamics," Research Policy, Elsevier, vol. 41(8), pages 1357-1374.
    10. Miller, Jason W. & Phares, Jonathan & Burks, Stephen V., 2023. "Job Creation and Job Destruction Dynamics in the U.S. Truck Transportation Industry, 1995-2019," IZA Discussion Papers 16184, Institute of Labor Economics (IZA).
    11. Jaime Gómez & Raquel Orcos & Sergio Palomas, 2014. "The evolving patterns of competition after deregulation: the relevance of institutional and operational factors as determinants of rivalry," Journal of Evolutionary Economics, Springer, vol. 24(4), pages 905-933, September.
    12. Tammy L. Madsen & Gordon Walker, 2017. "Competitive heterogeneity, cohorts, and persistent advantage," Strategic Management Journal, Wiley Blackwell, vol. 38(2), pages 184-202, February.

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