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Does rivals' innovation matter? A competitive dynamics perspective on firms' product strategy

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  • Chen, Tianxu
  • Tribbitt, Mark A.
  • Yang, Yi
  • Li, Xiaomei

Abstract

We build on the awareness-motivation-capability (AMC) framework of competitive dynamics research to examine how a signal of a rival's innovation, in the form of research and development (R&D) intensity, may influence a focal firm's product actions. We argue that a rival's R&D intensity increases a focal firm's awareness of a competitive threat and thus its motivation to react by increasing its product actions. However, this competitive impact is conditional on the focal firm's size and performance relative to the rival, as well as the strategic homogeneity of the two. We use the AMC framework to analyze such moderating effects.

Suggested Citation

  • Chen, Tianxu & Tribbitt, Mark A. & Yang, Yi & Li, Xiaomei, 2017. "Does rivals' innovation matter? A competitive dynamics perspective on firms' product strategy," Journal of Business Research, Elsevier, vol. 76(C), pages 1-7.
    • Handle: RePEc:eee:jbrese:v:76:y:2017:i:c:p:1-7
    DOI: 10.1016/j.jbusres.2017.02.016
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    References listed on IDEAS

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    3. Lien, Wan-Chien & Chen, Tianxu & Chen, Jianhong & Sohl, Jeffrey E., 2021. "How do financial analysts’ recommendations affect firm competitive actions? A rival-centric view," Journal of Business Research, Elsevier, vol. 134(C), pages 531-539.
    4. Thomas Hutzschenreuter & S. Alexander Borchers & Philippa‐Luisa Harhoff, 2021. "Competitors matter: How competitors' actions moderate the influence of firm profitability on the prioritization between growth and efficiency increase," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 326-342, March.
    5. Travassos Rosário, Albérico & Carrizo Moreira, António & Macedo, Pedro, 2021. "Competitive dynamics of strategic groups in the Portuguese banking industry," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    6. Mehrabi, Hamed & Coviello, Nicole & Ranaweera, Chatura, 2021. "When is top management team heterogeneity beneficial for product exploration? Understanding the role of institutional pressures," Journal of Business Research, Elsevier, vol. 132(C), pages 775-786.
    7. Degl'Innocenti, Marta & Grant, Kevin & Šević, Aleksandar & Tzeremes, Nickolaos G., 2018. "Financial stability, competitiveness and banks' innovation capacity: Evidence from the Global Financial Crisis," International Review of Financial Analysis, Elsevier, vol. 59(C), pages 35-46.
    8. Yalcinkaya, Goksel & Aktekin, Tevfik & Yeniyurt, Sengun, 2020. "Out with the old: A Bayesian approach to estimating product modification rates," Journal of Business Research, Elsevier, vol. 118(C), pages 141-149.
    9. Lin, Hao-Chieh & Lin, Pei-Chun, 2019. "The interplay between CEO-TMT exchange level and differentiation: Implications for firm competitive behaviors and performance," Journal of Business Research, Elsevier, vol. 95(C), pages 171-181.
    10. Chih-Yi, Su & Bou-Wen, Lin, 2021. "Attack and defense in patent-based competition: A new paradigm of strategic decision-making in the era of the fourth industrial revolution," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    11. Yusen Dong & Senhua Chen & Yixue Wu, 2023. "Keeping up with the Joneses: The role of investee peers corporate environmental responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1841-1855, July.
    12. Papazoglou, Michalis E. & Spanos, Yiannis E., 2021. "“Influential knowledge and financial performance: The role of time and rivals’ absorptive capacity”," Technovation, Elsevier, vol. 102(C).
    13. Lee, Eugenia Y. & Ha, Wonsuk & Park, Sunyoung, 2023. "Auditor specialization in R&D and clients’ R&D investment-q sensitivity," Journal of Contemporary Accounting and Economics, Elsevier, vol. 19(2).

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