Abstract
Research supports mutual forbearance theory by demonstrating the inverted U-shaped relationship it predicts, between multimarket contact (MMC) and market entry, in a variety of mature product markets. Less studied is the role of MMC when markets are in turmoil. We show that when product markets are at risk of disruption, dominant firms that have MMC with fringe rivals - firms that compete with uncommon business models and technologies – are more likely to enter. MMC with dominant rivals continues to influence entry as mutual forbearance theory predicts, but its effect is weaker in market in flux as compared to stable markets. The findings contribute to the MMC theory and research on firm response to disruptive innovation.
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