Working with rivals: The impact of competitor alliances on financial performance

Xueming Luo, Aric Rindfleisch, David K. Tse

Research output: Contribution to journalArticlepeer-review

Abstract

To survive and prosper in today's highly competitive environment, firms are increasingly engaging in cooperative alliances with their rivals. However, the impact of these competitor alliances on financial performance is largely unknown. This research examines this issue. Using both survey and archival data, the authors conduct two studies that reveal that the intensity of a firm's alliances with its competitors has a curvilinear (inverted U-shaped) influence on return on equity. In addition, the authors find that a firm's competitor orientation, as embodied in its strategies and objectives, can strengthen or weaken this curvilinear effect. Overall, these findings indicate that both competition and cooperation have dark sides that a firm must carefully manage when working with rivals.

Original languageEnglish (US)
Pages (from-to)73-83
Number of pages11
JournalJournal of Marketing Research
Volume44
Issue number1
DOIs
StatePublished - Feb 2007

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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