Multimarket contact and target size: The moderating effect of market concentration and location

Acquisitions are competitive moves that disrupt an industry’s competitive structure. As a result, firms are often not passive observers of their rival’s acquisitions, but actively retaliate against such competitive moves. In this study, we explore these dynamics by analyzing one way in which multimarket contact may influence acquisition strategies, namely, the type of targets acquired. We contribute to the acquisition literature by clarifying the role that pre-acquisition competitive interdependencies play in firms’ acquisition strategies. Specifically, we suggest that high multimarket contact firms do not necessarily avoid acquisition activity. Instead, these firms are more likely to acquire targets that are less likely to incur retaliation from interconnected rivals. We also explore two important boundary conditions to this relationship: (1) the market’s competitive structure and (2) the location of the target firm. Our empirical tests of a sample of 741 bank holding companies from 1995 to 2014 offer support for our hypotheses.

Competing and cooperating globally: how firms’ multimarket contact relates to joint price elevation in coopetition networks

Purpose This study aims to draw attention to the familiarity effect among international multimarket contact (MMC) firms on coopetition in the global container shipping industry and to better understand the contingency model of structural holes and in-degree centrality on joint price elevation actions and subsequent performance. Design/methodology/approach Drawing on competitive dynamics and the literature on networks, a panel data model is developed from 6,489 competitive and 7,146 cooperative actions of the top 21 shipping firms in 18 global arenas with a structured content analysis method being applied. Findings Stronger MMC by firms requires increased levels of cooperative actions to elevate prices. This coopetition relationship is enhanced or weakened when the focal firm occupies a higher level of structural hole or position of competitive in-degree centrality. Practical implications Shipping liners seeking to cooperate with joint action in oligopolistic markets are offered guidelines and strategies to increase their performance through their actions. Originality/value This study contributes to the literature on coopetition networks by further analyzing interfirm relationships and interactions that enhance performance, while exploring network positioning strategies to mitigate risks.