Abstract
Abstract A structural model is proposed which integrates and extends previous findings on the interrelations between risk—return outcomes, market share, firm conduct attributes, and inter‐firm rivalry. It is argued that the relative impact of market share and firm conduct attributes on risk—return outcomes depends on the intensity of rivalry. The empirical setting is commerical banking in Indiana (1975–79). Latent variable path analysis (partial least‐squares) is used to estimate the model. The effect of market share is found to be quite important, even when possible ‘spurious’ effects due to differences in individual firm attributes are controlled for. Given consistent indications of oligopolistic coordination found in various parts of the model, it is inferred that the measured effect of market share reflects the exercise of market power.
Keywords
RivalrySpurious relationshipMarket powerMarket shareOligopolyEconomicsMarket structureMicroeconomicsEconometricsLatent variableBusinessIndustrial organizationMarketingComputer science
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Publication Info
- Year
- 1989
- Type
- article
- Volume
- 10
- Issue
- 6
- Pages
- 507-522
- Citations
- 208
- Access
- Closed
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Cite This
Karel Cool,
Ingemar Dierickx,
David B. Jemison
(1989).
Business strategy, market structure and risk‐return relationships: A structural approach.
Strategic Management Journal
, 10
(6)
, 507-522.
https://doi.org/10.1002/smj.4250100602
Identifiers
- DOI
- 10.1002/smj.4250100602