The Sustainability Performance Implications of Inter-Firm Coopetition

Academy of Management Proceedings, vol. 2024

Abstract

How inter-firm coopetition – simultaneous cooperation and competition among firms – influences a firm’s sustainability performance is of high interest for research and practice as coopetition can both create and destroy value. However, previous research has often taken a one-sided view on coopetition, has paid little attention to nuances, and has focused on financial performance outcomes, neglecting environmental and social performance as equally important elements of firm performance. The purpose of this study is thus to extend coopetition literature by investigating the influence of product market overlap, which reflects the intensity of competition in alliance relationships, on a firm’s sustainability performance. We test our hypotheses with a dataset of 542 firm-year observations between 2005 and 2021. First, our empirical analyses indicate that product market overlap in alliances has U-shaped relationships with environmental and with social performance. Second, our results show that sustainability governance significantly moderates one of these two relationships, namely the effect of product market overlap on social performance. We contribute to the coopetition literature by, first, investigating both benefits and dark sides of coopetition, second, promoting a nuanced understanding of coopetition by investigating product market overlap, and third, analyzing sustainability performance as under-researched outcome.

Authors 2

1. Yemisi Oke Aachen

   RWTH Aachen University

   Affiliation as printed

   RWTH Aachen U. - Innovation and Entrepreneurship Group (WIN)

2. Denise Fischer

   University of Bonn

   Affiliation as printed

   U. of Bonn