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Multimarket competition, mobility barriers, and firm performance

Author

Listed:
  • Zied Guedri

    (EM - EMLyon Business School)

  • Jean Mcguire

Abstract

This study develops and tests a theoretical framework which suggests interactive dynamics, with strong performance implications, between the height of mobility barriers surrounding strategic groups and the extent of within-group multimarket competition. Empirical analysis drawn from a longitudinal sample of pharmaceutical firms indicates that within-group multimarket competition has strong positive effect on firm performance for strategic groups surrounded by high mobility barriers. As we move lower on the mobility barriers hierarchy, this effect decreases, becoming non-significant for groups surrounded by moderate mobility barriers and negative for groups surrounded by low mobility barriers. These findings highlight the conditions under which mobility barriers and multimarket competition have significant performance implications. In addition, our results suggest that mobility barriers and multimarket competition are not substitutive but complementary devices promoting mutual coordination within strategic groups. Finally, our findings point to the need to consider multimarket contacts as an aggregate property of strategic groups.

Suggested Citation

  • Zied Guedri & Jean Mcguire, 2011. "Multimarket competition, mobility barriers, and firm performance," Post-Print hal-02312578, HAL.
  • Handle: RePEc:hal:journl:hal-02312578
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    Citations

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    Cited by:

    1. Jaime Gómez & Raquel Orcos & Sergio Palomas, 2013. "Multimarket Contact Externalities: The Effect of Rivals' Multimarket Contacts on Focal Firm Performance," Working Papers 1302, Departament Empresa, Universitat Autònoma de Barcelona, revised Apr 2013.
    2. Paul F. Skilton & Ednilson Bernardes & Mei Li & Steven A. Creek, 2020. "The Structure of Absorptive Capacity in Three Product Development Strategies," Journal of Supply Chain Management, Institute for Supply Management, vol. 56(3), pages 47-65, July.
    3. Subrato Banerjee & Basri Savitha, 2021. "Competition reduces profitability: the case of the Indian life microinsurance industry," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(3), pages 383-398, July.
    4. Paola Rovelli & Vincenzo Butticè, 2020. "On the organizational design of entrepreneurial ventures: the configurations of the entrepreneurial team," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(2), pages 243-269, June.
    5. Avimanyu Datta, 2016. "Evaluating The Antecedents Of Foundational Innovations: A Longitudinal Look At Patents From Information Technology Industry," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-29, January.
    6. Galvin, Peter & Burton, Nicholas & Singh, Prakash J. & Sarpong, David & Bach, Norbert & Teo, Stephen, 2020. "Network rivalry, Competition and Innovation," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    7. Robson, Julie & van der Heijden, Hans, 2016. "Senior management perceptions of aspirational groups: A study of the UK general insurance market," Journal of Business Research, Elsevier, vol. 69(8), pages 2731-2738.
    8. Antoine Feuillet & Mickael Terrien & Nicolas Scelles & Christophe Durand, 2021. "Determinants of coopetition and contingency of strategic choices: the case of professional football clubs in France," Post-Print halshs-02974491, HAL.
    9. Anna Minà & Giovanni Battista Dagnino & Gianluca Vagnani, 2020. "An interpretive framework of the interplay of competition and cooperation," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(1), pages 1-35, March.

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