Theoretical foundation for the study of competition networks and their performance implications

This is a conceptual study that lays the foundation for competition network theory. It explains the distinction between the characteristics of competition networks versus social networks. It shifts focus from the industry or firm to the network level of analysis when studying competition. Specifically, it relates firm performance to the intensity of the firm’s competitive relations, moderated by multimarket contact, as well as to degree centrality of the firm and its competitors in their respective competition networks, moderated by shared third-party competitive relations. Hence, besides industry structure and the firm’s resource configuration, the firm’s position in its competition network and the nature of its competitive relations can shape its performance.