Inter-firm rivalry and firm growth: is there any evidence of direct competition between firms?

Alex Coad () and Mercedes Teruel Carrizosa ()

Industrial and Corporate Change, 2013, vol. 22, issue 2, 397-425

Abstract: Inter-firm competition has received much attention in the theoretical literature, but recent empirical work suggests that the growth rates of rival firms are uncorrelated. We begin by investigating the correlations of the growth rates of competing firms (i.e. the largest and second-largest firms in the same industry) and observe that, surprisingly, the growth of these firms can be taken as uncorrelated. Nevertheless, peer-effect regressions, that take into account the simultaneous interdependence of growth rates of rival firms, are able to identify significant negative effects of rivals' growth on a firm's growth. Copyright 2013 The Author 2012. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Date: 2013
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Working Paper: Inter-firm rivalry and firm growth: Is there any evidence of direct competition between firms? (2010)
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