Multimarket Contact, Rivalry Deterrence over Technological Resources and International Market Exit (WITHDRAWN)

Abstract

Research shows that the higher a firm’s level of multimarket contact (MMC) with its rivals in a country, the lower the likelihood the firm will exit that country, because MMC leads to mutual forbearance, which deters rivalry and protects a firm’s survival. Yet, recent studies suggest that in technology-intensive industries MMC may increase rivalry, since MMC increases familiarity of a focal firm’s technological resources, leading to a greater threat of knowledge spillovers and imitation from multimarket rivals, which increases a focal firm’s incentives to protect its technological resources by attacking multimarket rivals. Grounded in the research on MMC in international markets and the resource-based view of the firm, we propose and test hypotheses suggesting that a firm’s MMC with its rivals in a country increases the likelihood the firm will leave that country if competition over technological resources among country rivals escalates, unless the firm has strong capabilities to protect its technological resources. We found robust support for our hypotheses by testing them with a sample of 84 mobile phone vendors operating in 45 countries from 2003 to 2015.