Learning from experience? Technological investments and the impact of coopetition experience on firm profitability. Issue 1 (February 2020)

• Record Type: Journal Article
• Authors: Estrada, Isabel; Dong, John Qi
• Is Part Of: Long range planning. Volume 53:Issue 1(2020)
• Publication Date: 2020-02
• Subjects: Coopetition -- Coopetition experience -- Information technology investment -- R&D investment -- Firm profitability; Management -- Periodicals; Business planning -- Periodicals; Gestion -- Périodiques; Management; Periodicals; 658.4012
• DOI: 10.1016/j.lrp.2019.01.003
• Languages: English
• ISSNs: 0024-6301

Abstract

Abstract: A firm may learn how to manage coopetition as it becomes more experienced. Conversely, because of the complexity of coopetition, a firm may fail to make sense of its experiences in working with coopetitors and may thus fail to learn from these experiences effectively. Building on this premise, we develop a contingency view regarding the relationship between coopetition experience and firm profitability — as coopetition experience can enhance or hurt firm profitability and the internal abilities of firms to capitalize on experience are heterogeneous. Analyzing a panel data set from 911 Spanish manufacturing firms between 2007 and 2014, we provide empirical evidence on the often overlooked but critical detrimental effects of coopetition experience on firm profitability and reveal the asymmetric moderating role of a firm's technological investments in information technology (IT) and R&D. Specifically, we find that the impact of coopetition experience on firm profitability is negative and becomes more negative as R&D investment increases, which suggests that R&D investment may aggravate the detrimental effects of coopetition experience. However, as IT investment increases, the effect of coopetition experience on firm profitability shifts from negative to positive, indicating that firms can counteract the "dark side" of coopetition experience through substantial IT investment.