From Crisis to Opportunity: How Market Shocks Impact Interfirm Rivalry

Abstract

Since its inception in the mid 1980s, competitive dynamics research has been concerned with the causes and consequences of interfirm rivalry (Bettis & Weeks, 1987; MacMillan et al., 1985; Smith et al., 2001b). In their analyses, competitive dynamics scholars have adopted the idea that interfirm rivalry is reflected in the ongoing interchange of competitive actions between individual competitors (Chen & MacMillan, 1992; Ferrier, 2001) – an idea rooted in Schumpeterian and Austrian economics (Schumpeter, 1934; Young et al., 1996). This notion of rivalry had an important impact on the empirical approach of competitive dynamics research in that it geared the scholarly focus toward the real competitive actions exchanged between pairs (dyads) of firms (Baum & Korn, 1999; Chen & MacMillan, 1992; Chen et al., 1992; Chen, Su, & Tsai, 2007)