Multimarket coopetition: How the interplay of competition and cooperation affects entry into shared markets

Klemens Klein, Thorsten Semrau, Sascha Albers*, Edward J. Zajac

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

This study sheds light on how coopetition among rival firms that meet in multiple markets affects their competitive behavior in terms of entry into markets with rival incumbents. Specifically, we develop theoretical arguments on how the probability of a firm entering into shared markets is shaped by the complex interplay among the intensities of simultaneous competition and cooperation. We test our ideas using longitudinal data covering 38,184 firm-market-year observations from the airline industry in Europe. In line with our theoretical arguments, we find that when the intensity of cooperation is low, the link between multimarket competition and market entry follows an inverted U. However, an increasing intensity of cooperation between multimarket firms attenuates this relationship. Specifically, the intensity of cooperation weakens the positive link between multimarket competition and market entry when rivals share only a few markets and also weakens the negative relationship between competition and market entry in situations of high market overlap. We discuss the implications of these findings for the literature on coopetition and beyond and highlight their practical implications.

Original languageEnglish (US)
Article number101868
JournalLong Range Planning
Volume53
Issue number1
DOIs
StatePublished - Feb 2020

Keywords

  • Cooperation
  • Coopetiton
  • Market entry
  • Multimarket competition
  • Multimarket contact
  • Multimarket coopetition

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Finance
  • Strategy and Management

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