Competitors matter: How competitors' actions moderate the influence of firm profitability on the prioritization between growth and efficiency increase

Thomas Hutzschenreuter, S. Alexander Borchers, Philippa Luisa Harhoff

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

Firms have been shown to prioritize between growth and efficiency increase sequentially depending on their level of profitability. Adding arguments from the attention-based view to this discussion, we hypothesize that actions of competitors in the marketplace could moderate this relationship. Using data from business simulations, we specifically test whether the influence of firm profitability on the prioritization decision varies with changes in competitor products' pricing, promotion, and quality. Our analysis reveals that product promotion intensifications of competitors strengthen the positive relationship between firm profitability and the prioritization of growth relative to efficiency increase, whereas product price reductions weaken this relationship.

Original languageEnglish
Pages (from-to)326-342
Number of pages17
JournalManagerial and Decision Economics
Volume42
Issue number2
DOIs
StatePublished - Mar 2021

Fingerprint

Dive into the research topics of 'Competitors matter: How competitors' actions moderate the influence of firm profitability on the prioritization between growth and efficiency increase'. Together they form a unique fingerprint.

Cite this