Managing Inter-firm Rivalry Dynamics of Freight Forwarders: The Impact of Knowledge and Environments

Abstract

This study aims to identify key factors affecting the competitive attack and responses of freight forwarding companies and the impact of environmental complexity on inter-firm rivalry. In order to achieve these research objectives, this study adopts a knowledge-based perspective and develops a competition dynamics model of freight forwarders, which examines how freight forwarders’ knowledge affect inter-firm rivalry, such as the likelihood of a competitive attack of a focal firm, the likelihood of its rival’s response to the attack, and how external environmental complexity moderate the association between freight forwarders’ knowledge and inter-firm rivalry. Results show that the extent to which the freight forwarding companies own firm-, industry- and international-specific knowledge facilitates the likelihood of a focal firm’s attack and lessens the likelihood of responses from the focal firm’s rivals. Environmental characteristics such as complexity, dynamism and hostility, were found to moderate the association between the knowledge of a focal firm and the likelihood of responses of rivals by further lessening the likelihood of the retaliation of rivals to the attack. Finally, academic and managerial implications of research findings are discussed.