When Does Competition Foster Commitment?

• 成果类型: Article
• 署名作者: Ferreira, Daniel; Kittsteiner, Thomas
• 署名单位: University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK; European Corporate Governance Institute; RWTH Aachen University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2015.2295
• 发表日期: 2016
• 页码: 3199-3212
• 关键词: competition; COMMITMENT; PRODUCTIVITY

摘要

Consider a firm that would like to commit to a focused business strategy because focus improves efficiency and thus increases profit. We identify two general conditions under which tougher competition strengthens the firm's ability to commit to a focused strategy. Under these conditions, competition fosters commitment for two reasons: (i) competition reduces the value of the option to diversify (the contestability effect), and (ii) competition increases the importance of being efficient (the efficiency effect). We use a number of different models of imperfect competition to illustrate the applicability of our results. Our examples suggest that the contestability effect is very general. In contrast, the efficiency effect often requires further conditions, which are specific to the nature of competition in each model. In both cases, our analysis helps us predict when these effects are more likely to be observed.