Archive for May, 2011

The Occurrence of Coopetition and Its Driving Factors (Abstract)

Wednesday, May 11th, 2011

THE OCCURRENCE OF COOPETITION AND ITS DRIVING FACTORS: EVENT HISTORY ANALYSIS ON THE ANTECEDENTS

Abstract

What makes firms cooperate with their direct competitors? This research focuses on this issue, adopting transaction cost economics and resource based view as theoretical perspectives, coopetitive joint venture as proxy of coopetition, and event history analysis as techniques of data analysis. Resource based view perspective confirms that direct competitors sometimes possess similar knowledge and a common market vision that may encourage them to establish coopetition. Transaction cost economics explains how firm manages the extremely risky business of coopetition in which individual business incentives of direct competitors may lead to opportunistic behaviors. Coopetitive joint venture is every joint venture that involves two or more firms that share the same four digits of USSIC code. Using a database of joint ventures of five industries and event history analysis, the research identifies six firm and two industry level driving factors of the occurrence of coopetition. Five industries employed in this research are (1) car, (2) airlines, (3) telephone, (4) banking, and (5) software industries.

Firm level analysis includes the relationships between the occurrence of coopetition and: (1) number of prior collaborative agreement, (2) cultural distance of parent firms, (3) similarity of parent firms’ country, (4) similarity of firm and target firms’ country of origin, (5) industry similarity of parent and target firms, and (6) target firms’ country risk. In general, the results of the analysis at the firm level conclude that coopetition is more likely to occur, if (1) the number of prior collaborative agreement increases, (2) the cultural distance of parent firm increases, (3) the target firm is located in the country of (at least) one of the parent firms, (4) the target firm operates in the different industry from the parents, and (5) the target firm is located in a country with low business risk.

Industry level analysis comprises two factors, (1) number of firm involved in coopetition, and (2) time lag between every two consecutive coopetition occurred in an industry. Regardless of minor exceptions found in airlines, telephone and software industries, coopetition in an industry is more likely to occur when (1) the number of firms involved in coopetition increases, and (2) the time lag between every two consecutive coopetition decreases.

Keywords: coopetition, resource based view, transaction cost economics, event history analysis


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