Abstract
This study investigates how market shocks impact interfirm rivalry. Based on competitive dynamics research and imitation theory, we propose that market shocks upset the rivalrous process among firms. We argue that market shocks give rise to new competitive opportunities, challenge extant mutual forbearance equilibria, and make managers detach from rivals' extant competitive behaviors when contemplating own moves. To validate our arguments, we investigate with duration models how market shocks punctuate patterns in firm action sequences. Our study is set in the global insurance industry between 2001 and 2007 and explores the effects the terrorist attacks of September 11 and Hurricane Katrina had on the industry's interfirm rivalry in 2001 and 2005. The study's findings highlight a clear need for a stronger integration of the environmental context in competitive dynamics research.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
