Antecedents and Consequences of Competition: Towards an Integrative View By Jie Wu A dissertation submitted in partial fulfillment Of the requirements for the degree of Doctoral of Philosophy (Business Policy) in the National University of Singapore 2008 Doctoral Committee: Associate Professor Nitin Pangarkar, Chair Professor Kulwant Singh Associate Professor Albert Teo Chu Ying To my father ii ACKNOWLEDGEMENTS I would like to thank my dissertation committee: Professor Nitin Pangarkar, Professor Kulwant Singh and Professor Albert Teo. Professor Singh provided many insights and introduced me to his student (Dr Ang Siah Hwee), which proved to be very useful in guiding me to some of the critical sources for understanding a difficult and unfamiliar context. I will always appreciate his willingness to serve on my committee in spite of his extremely busy schedule, and his willingness to accommodate my demands on his time. To Professor Nitin Pangarkar, I owe debts in many different forms. From the asking of an interesting but provable research question, to theoretical intricacies, to the finer points of academic writing, there is no part of this dissertation that has not been influenced by my interactions with Nitin. Without his patience, understanding and unwavering supports throughout the entire thesis writing process, I would not have considered or tackled those “simple” ideas. I will always regard him as one of my best friends and one of the most important supports I have had. Professor Albert Teo has been a constant source of support. His willingness to provide powerful software for my data analysis as well as data, are some of the many ways that Teo helped me. My data collection has been greatly imprinted by his excellent experimental design. Beyond my committee, I thank the many faculty members who served as teachers and took time out of their schedules to provide feedback for my ideas or help in thinking through a situation. For iii their generous support in this regard I would like to especially thank Professor Paul Olk. Without an exposure to Professor Olk and the world that he opened up for me, this dissertation would have been something quite different and far less interesting. For expanding my theoretical horizons, and for his careful guidance of my work, I shall always be indebted to Professor Olk. I would also like to thank Professor Anand Swaminathan, whose suggestions on theory issues and econometrics modeling and data manipulation are very useful. I am grateful for his general willingness to invest his time in providing insightful comments on my research. I also extend my sincere thanks to Professor Peter J. Hwang, Professor Kwanghui Lim, Professor Wong Poh Kam and Professor Andrew Delios for their help, support and guidance at the different stages of my Ph. D. program. I thank my colleagues and friends in NUS study, especially Chaoyi, Hailu and Xufei. From whom, I received many good ideas and support. Other people who have been invaluable over the past years include the staff at the Hon Sui Sen Memorial Library. Although the entire staff has been extremely helpful, I especially appreciate three people who have constantly gone out of their way to help me, Kah Wei, Seow Peng, Swee Lian. I also thank Woo Kim for helping me go through administrative steps easily and for always making my life so much easier. Jenny and Wendy have been helped me through these past years and I thank them for their many acts of assistance and kindness. iv Finally, I thank the people who have contributed the most to my life and this dissertation, my family. For their many sacrifices, and their love and encouragement, I dedicate this dissertation to them. v TABLE OF CONTENTS DEDICATION ii ACKNOWLEDGEMENTS . iii LIST OF TABLES . ix LIST OF FIGURES . x LIST OF APPENDICES xi ABSTRACT CHAPTER INTRODUCTION . 1.1 Introduction . 1.2 Conceptual Overview 1.2.1 Background and Motivation 1.2.2 Theoretical Perspectives . 1.2.3 Research Design CHAPTER 2: FIRM-LEVEL CAPABILITY-BASED AND EXPERIENCEBASED COMPETITOR INDENTIFICATION . 12 2.1 Introduction . 13 2.2 Theoretical Development 15 2.3 Two Firm-Level Dimensions: Capability and Experience . 18 2.3.1 Firm-Level Capability . 18 2.3.2 Firm-Level Technological Experience . 20 2.4 Hypotheses . 22 2.4.1 Firm-Level Capability Affects Competitor Identification . 22 2.4.2 Firm-Level Experience Affects Competitor Identification 28 2.5 Data and Methods . 31 2.5.1 Data . 31 2.5.2 Model Specifications and Econometric Issues 33 2.5.3 Operational measures for independent variables 37 vi 2.5.4 Operational measures for control variables 41 2.6 Results and Robustness Check . 46 2.6.1. Results . 46 2.6.2 Robustness Check 51 2.7 Discussions 51 2.8 Limitations and Future Directions 57 CHAPTER 3: TOWARD A UNIFIED PERSPECTIVE ON COMPETITION, COLLBORATION AND INNOVATION . 59 3.1 Introduction . 60 3.2 Background and Motivation 62 3.2.1 Competition and Innovation 62 3.2.2 Collaboration and Innovation . 64 3.3 Conceptual Development . 65 3.3.1 Competition as a source of information 65 3.3.2 Collaboration facilitates information exploitation 68 3.3.3 The Interactive Effect of Competition and collaboration . 71 3.3.4 Industry context as a contingent factor: High technology industries . 73 3.4 Data and Methods . 77 3.4.1 Operational measures for the key variables . 78 3.4.2 Technological intensity of Industry 80 3.4.3 Control variables . 81 3.4.4 Estimation methods . 83 3.5 Results and Robustness Check . 85 3.5.1 Results 85 3.5.2 Robustness Check 89 3.6 Discussion and Concluding Remarks 90 CHAPTER CONCLUSIONS 94 4.1 Contributions to Theory . 94 4.2 Contributions to Management and Strategy . 97 4.3 Limitations and Future Research . 98 APPENDICES . 111 vii BIBLIOGRAPHY 137 viii LIST OF TABLES TABLE 2.1 INDUSTRY, SUB-SECTORS ACTIVITY AND NUMBER OF FIRM PARTICIPATING BY SUB-SECTORS 100 TABLE 2. CORRELATION MATRIX OF MAIN VARIABLES 101 TABLE 2.3 RESULTS OF ZINB MODELS ESTIMATIONS OF COMPETITORS REGRESSED AGAINST CAPABILITY . 102 TABLE 2.4 RESULTS OF ZINB MODELS ESTIMATIONS OF COMPETITORS REGRESSED AGAINST TECHNOLOGICAL EXPERIENCE 103 TABLE 3.1 CLASSIFICATION HIGH- MEDIUM- AND LOW-TECH INDUSTRIES 104 TABLE 3.2 DESCRIPTIVE STATISTICS FOR KEY VARIABLES ACROSS SECTORS 105 TABLE 3.3 CORRELATION MATRIX……………………………………………………… 117 TABLE 3.4 MAXIUM LIKELIJOOD ESTIMATES OF ZINB MODELS FOR PATENT INNOVATION …………………… ……………………………………………….118 ix LIST OF FIGURES FIGURE 2.1 THE RELATIONSHIP BETWEEN ORGANIZATIONAL CAPABILITIES AND COMPETITOR IDENTIFICATION . 108 FIGURE 3.1 THE RECONSTRUCTION OF SOCIAL RELATIONS THROUGH COLLABORATION 109 FIGURE 3.2 A UNIFIED MODEL OF COMPETITION, COLLABORATION AND INNOVATION 110 x Argote, L. 1999. Organizational learning: creating, retaining and transferring knowledge. Boston: Kluwer Academic and Company. Argote, L., Beckman, S. L. & Epple, D. 1990. 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Academy of Management Executives, 7: 7-28. 153 [...]... antecedents and consequences of competition This study moves beyond the Resource Based View s focus on competitive advantage to analyze the antecedents and consequences of competition and comprehensively illustrate the whole process of competition Therefore, this study addresses the drawbacks of the Resource Based View and demonstrates the importance and necessity of explaining dynamic process of competition. .. this study, I examine the antecedents and consequences of competition The first essay, in the dissertation, builds upon the Resource Based View and cognitive approach to competition with the motivation of understanding the antecedents of competition This essay proposes two firm-specific, theoretical-based dimensions: organizational capability and organizational experience and hypothesizes that these... influence a firm’s view of competition The research on the antecedents of competition in the first essay is extended to the consequences of competition in the second essay Building on the concepts developed in the first essay, I propose a conceptual model of competition, collaboration and innovation and explore the interactive effect of competition and collaboration and innovation performance My study contributes... experience of the organization, in terms of internal and external benefits for an organization (Baum and Ingram, 1998) The concept of schema (Axelrod, 1973) is a major tool to understand the effect of organizational experience on the perception of the number of competitors “A schema is an abridged, generalized, corrigible organization of experience that serves as an initial frame of reference for action and. .. adopt the perspective of the management of a focal organization and examine the antecedents and consequences of competition I ask two questions: (1) How do a firm’s capability and experience affect competitor analysis in general and competitor identification1 in particular? (2) Do particular combinations of competition and collaboration result in better innovation performance? The first essay, in the... limited protection of industrial and intellectual property rights and indeterminacy of law enforcement, the effect of an organization’s capability and experience is likely to be magnified (Child and Markoczy, 1993) China, as the world’s largest emerging market and a changing institutional economy, provides a productive setting to examine organization’s capability and experience and their intensified... Montgomery, 1999) 1 2 The purpose of the second essay is to propose a unified perspective to competition, collaboration and innovation and explore the interactive effect of competition and collaboration on innovation performance (See Figure 1.1) Essay I Essay II Capability Experience Competition Innovation Network Figure 1.1 A Framework of the Antecedents and Consequences of Competition I use survey data... of a bundle of resources From a resource-based view, a firm is a unique bundle of tangible and intangible resources and capability (Penrose, 1959; Wernerfelt, 1984), and resources complement each other (Makadok and Barney, 2001) A firm’s competitive position and advantage in the industry are defined by its unique resource bundles (Conner, 1994) rather than each resource independently Soh, Mahmood and. .. interpretations and constrains organizational action and change (Fiol, 1991) Gustafson and Reger (1995) distinguished two types of organizational identity attributes: tangible substantive attributes that include “those that focus on products, strategies, geographic scope, or core competencies”, and intangible identity attributes that are “reflected in organizational culture and underlying values that transcend any... Based View and cognitive approach to competition with the motivation of understanding the antecedents of competition This essay proposes two firm-specific, theory-based dimensions: organizational capability and organizational experience I hypothesize that these two vital firm-specific dimensions will have significant cognitive implications for competition they will influence firm’s view of competition . sincere thanks to Professor Peter J. Hwang, Professor Kwanghui Lim, Professor Wong Poh Kam and Professor Andrew Delios for their help, support and guidance at the different stages of my Ph antecedents and consequences of competition. The first essay, in the dissertation, builds upon the Resource Based View and cognitive approach to competition with the motivation of understanding. the Resource Based View s focus on competitive advantage to analyze the antecedents and consequences of competition and comprehensively illustrate the whole process of competition. Therefore,