Something in common

Competitive dissimilarity and performance of rivals with common shareholders

Brian L. Connelly, Kang B.O.K. Lee, Laszlo Tihanyi, Samuel Certo, Jonathan L. Johnson

Research output: Contribution to journalReview article

1 Citation (Scopus)

Abstract

Economists have long held that bringing firms under the umbrella of a common ownership structure creates monopolistic conditions that reduce competition. We challenge this view by investigating competition between firms in a nuanced manner. We examine the competitive and performance implications of “common institutional ownership,” which occurs when an institutional investor owns a sizeable number of shares in two publicly traded firms. We argue that rival firms with common ownership structures will engage in dissimilar competitive action repertoires to avoid direct competition with each other. Competing aggressively, but with dissimilar action repertoires, allows rivals to maintain high levels of performance. Competing with dissimilar action repertoires also helps ensure that performance disparity between the two firms remains low. In other words, competitive aggressiveness with dissimilar action repertoires yields an optimal competitive solution for rival firms and their common owners.

Original languageEnglish (US)
Pages (from-to)1-21
Number of pages21
JournalAcademy of Management Journal
Volume62
Issue number1
DOIs
StatePublished - Feb 1 2019

Fingerprint

Shareholders
Dissimilarity

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Strategy and Management
  • Management of Technology and Innovation

Cite this

Something in common : Competitive dissimilarity and performance of rivals with common shareholders. / Connelly, Brian L.; Lee, Kang B.O.K.; Tihanyi, Laszlo; Certo, Samuel; Johnson, Jonathan L.

In: Academy of Management Journal, Vol. 62, No. 1, 01.02.2019, p. 1-21.

Research output: Contribution to journalReview article

Connelly, Brian L. ; Lee, Kang B.O.K. ; Tihanyi, Laszlo ; Certo, Samuel ; Johnson, Jonathan L. / Something in common : Competitive dissimilarity and performance of rivals with common shareholders. In: Academy of Management Journal. 2019 ; Vol. 62, No. 1. pp. 1-21.
@article{c8e479cfd28943e2b65fe99ec58c5c1f,
title = "Something in common: Competitive dissimilarity and performance of rivals with common shareholders",
abstract = "Economists have long held that bringing firms under the umbrella of a common ownership structure creates monopolistic conditions that reduce competition. We challenge this view by investigating competition between firms in a nuanced manner. We examine the competitive and performance implications of “common institutional ownership,” which occurs when an institutional investor owns a sizeable number of shares in two publicly traded firms. We argue that rival firms with common ownership structures will engage in dissimilar competitive action repertoires to avoid direct competition with each other. Competing aggressively, but with dissimilar action repertoires, allows rivals to maintain high levels of performance. Competing with dissimilar action repertoires also helps ensure that performance disparity between the two firms remains low. In other words, competitive aggressiveness with dissimilar action repertoires yields an optimal competitive solution for rival firms and their common owners.",
author = "Connelly, {Brian L.} and Lee, {Kang B.O.K.} and Laszlo Tihanyi and Samuel Certo and Johnson, {Jonathan L.}",
year = "2019",
month = "2",
day = "1",
doi = "10.5465/amj.2017.0515",
language = "English (US)",
volume = "62",
pages = "1--21",
journal = "Academy of Management Journal",
issn = "0001-4273",
publisher = "Academy of Management",
number = "1",

}

TY - JOUR

T1 - Something in common

T2 - Competitive dissimilarity and performance of rivals with common shareholders

AU - Connelly, Brian L.

AU - Lee, Kang B.O.K.

AU - Tihanyi, Laszlo

AU - Certo, Samuel

AU - Johnson, Jonathan L.

PY - 2019/2/1

Y1 - 2019/2/1

N2 - Economists have long held that bringing firms under the umbrella of a common ownership structure creates monopolistic conditions that reduce competition. We challenge this view by investigating competition between firms in a nuanced manner. We examine the competitive and performance implications of “common institutional ownership,” which occurs when an institutional investor owns a sizeable number of shares in two publicly traded firms. We argue that rival firms with common ownership structures will engage in dissimilar competitive action repertoires to avoid direct competition with each other. Competing aggressively, but with dissimilar action repertoires, allows rivals to maintain high levels of performance. Competing with dissimilar action repertoires also helps ensure that performance disparity between the two firms remains low. In other words, competitive aggressiveness with dissimilar action repertoires yields an optimal competitive solution for rival firms and their common owners.

AB - Economists have long held that bringing firms under the umbrella of a common ownership structure creates monopolistic conditions that reduce competition. We challenge this view by investigating competition between firms in a nuanced manner. We examine the competitive and performance implications of “common institutional ownership,” which occurs when an institutional investor owns a sizeable number of shares in two publicly traded firms. We argue that rival firms with common ownership structures will engage in dissimilar competitive action repertoires to avoid direct competition with each other. Competing aggressively, but with dissimilar action repertoires, allows rivals to maintain high levels of performance. Competing with dissimilar action repertoires also helps ensure that performance disparity between the two firms remains low. In other words, competitive aggressiveness with dissimilar action repertoires yields an optimal competitive solution for rival firms and their common owners.

UR - http://www.scopus.com/inward/record.url?scp=85062563636&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85062563636&partnerID=8YFLogxK

U2 - 10.5465/amj.2017.0515

DO - 10.5465/amj.2017.0515

M3 - Review article

VL - 62

SP - 1

EP - 21

JO - Academy of Management Journal

JF - Academy of Management Journal

SN - 0001-4273

IS - 1

ER -