Multimarket Contact, Strategic Alliances, and Firm Performance

Research on multimarket contact and firm performance has produced mixed results. To reconcile this discrepancy, we theorize how varying levels of multimarket contact may generate mutual forbearance that influences firm performance. We also examine how strategic alliances moderate the relationship be...

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Bibliographic Details
Published in:Journal of management 2018-04, Vol.44 (4), p.1551-1572
Main Authors: Chuang, You-Ta, Dahlin, Kristina B., Thomson, Kelly, Lai, Yung-Cheng, Yang, Chun-Chi
Format: Article
Language:English
Subjects:
Alliances
Diversified companies
Economic models
Industrial markets
Market shares
Organizational performance
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Summary:Research on multimarket contact and firm performance has produced mixed results. To reconcile this discrepancy, we theorize how varying levels of multimarket contact may generate mutual forbearance that influences firm performance. We also examine how strategic alliances moderate the relationship between levels of multimarket contact and firm performance. Our analysis of 233 semiconductor firms across 52 markets reveals that multimarket contact has an inverted U-shaped relationship with a multimarket firm’s market share. The number of strategic alliances that a firm has helps to further extend the positive effect of multimarket contact and mitigate its negative effect on the firm’s market share. Accordingly, our study contributes to the literature on multimarket competition by shedding light on the conditions under which multimarket contact may increase/decrease firm performance.
ISSN:0149-2063
1557-1211
DOI:10.1177/0149206315615399