Abstract:
Understanding the effect of multimarket contact on competitive behavior has become a central issue for strategy scholars. However, we have limited understanding of how different types of interdependencies influence competitive behavior. In particular, while some theoretical models have analyzed how factor market dynamics impact firm outcomes, limited research has analyzed the differing effects of product and factor multimarket contact on competitive behavior. Utilizing a dataset on the competitive aggressiveness of large bank holding companies from 2000- 2010, the study finds that, while both product and factor multimarket contact have a negative effect on competitive aggressiveness, the negative effect is stronger for product multimarket contact. These findings contribute to the literature on multimarket contact, competitive dynamics, and factor market competition.
