Does Competition Improve Performance? Evidence from the Czech Manufacturing Industries (original) (raw)

Competitiveness of Czech Enterprises: What affects the performance of the Enterprise?

Review of Economic Perspectives, 2009

Competitiveness of Czech Enterprises: What affects the performance of the Enterprise? This article is based on an empirical survey performed by the Research Centre for Competitiveness of the Czech Economy in 2007. We analyzed a sample of 432 companies. The main objective of the article is to formulate the factors which decrease the probability that a given company will be rated as competitive. Using advanced statistical methods (particularly statistical method of pattern recognition developed by UTIA ČSAV and modified in a special way for the purpose of our research) we formulate 20 qualitative characteristics, which can cause uncompetitiveness of the selected firm. These characteristics are then discussed and basic recommendations are drawn.

The Two Sides of Competition and Their Effect on the Economic Performance of Organizations

2009

Much, if not most, of the research into organizational behavior concerns organizations engaged in economically productive activities (eg, firms and the work units within them). The ability of such an organization not only to meet specific financial goals but also to make progress against its objectives more broadly construed, typically requires arm's-length exchanges with a myriad of actors outside its boundaries. By “arm's-length,” we mean those exchanges freely chosen at the discretion of the parties involved.

Competition in Service Industries

Operations Research, 2007

We analyze a general market for an industry of competing service facilities. Firms differentiate themselves by their price levels and the waiting time their customers experience, as well as different attributes not determined directly through competition. Our model therefore assumes that the expected demand experienced by a given firm may depend on all of the industry's price levels as well as a (steady-state) waiting-time standard, which each of the firms announces and commits itself to by proper adjustment of its capacity level. We focus primarily on a separable specification, which in addition is linear in the prices. (Alternative nonseparable or nonlinear specifications are discussed in the concluding section.) We define a firm's service level as the difference between an upper-bound benchmark for the waiting-time standard w and the firm's actual waiting-time standard.

Does more competition result in better port performance?

Maritime Economics & Logistics, 2017

This study examines the impact of competitive pressure on port performance. We merge the competitive rivalry literature with the port management literature to explain the inverted U-shaped relationship between competitive pressure and port performance within the increasingly competitive realm of world ports. A newly designed index measures competitive pressure that organizations face based on market commonality and domain overlap. Using data for global hubs and national gateway ports, we find potential diseconomies of excessive competitive pressure on port performance.

Time delays, competitive interdependence and firm performance

Strategic Management Journal, 2016

Research summary: Competitors' experiences of prior interactions shape patterns of rivalry over time. However, mechanisms that influence learning from competitive experience remain largely unexamined. We develop a computational model of dyadic rivalry to examine how time delays in competitors' feedback influence their learning. Time delays are inevitable because the process of executing competitive moves takes time, and the market's responses unfold gradually. We analyze how these lags impact learning and, subsequently, firms' competitive behavior, industry profits, and performance heterogeneity. In line with the extant learning literature, our findings reveal that time delays hinder learning from experience. However, this counterintuitively increases rivals' profits by reducing their investments in costly head-to-head competition. Time delays also engender performance heterogeneity by causing rivals' paths of competitive behavior to diverge. Managerial summary: While competitive actions such as new product launches, geographical expansion, and marketing campaigns require up-front resource commitments, the potential lift in profits takes time to materialize. This time delay, combined with uncertainty surrounding the outcomes of competitive actions, makes it difficult for managers to learn reliably from previous investment decisions. This results in systematic underinvestment in competitive actions. The severity of the underinvestment grows as the time delay between an investment and its positive results increases. Counterintuitively, however, competitors' collective underinvestment increases profit-making opportunities. In industries with large time delays, companies that do invest in competitive actions are likely to enjoy high returns on investment. It is also likely that rivals' paths of competitive behavior bifurcate. Together, these mechanisms generate large differences in competitors' profits.

Competition and Firm Performance: Lessons from Russia

SSRN Electronic Journal, 2000

The "big-bang" liberalization of the inefficient Russian economy in 1992 provides a fruitful setting for analyzing the impact of several dimensions of market competition and other factors on enterprise efficiency. We analyze 1992-1998 panel data on 14,961 enterprises covering 75 percent of industrial employment, emphasizing the varied sources, geographic scope, intensity, time path, and survival effects of competitive pressures. We find large, positive effects on TFP from competition in domestic product and local labor markets, and from imports and better transportation infrastructure, although the first effect appears only gradually. Non-state firms outperform state enterprises, even after correction for selection bias.

Do competitors respond to capacity changes? Evidence from U.S. manufacturers

Operations Management Research, 2019

The dynamics of strategic response among competing firms have been widely studied in strategic management literature-but this topic remains largely unaddressed in operations management. We develop and empirically test a competitive tactical response (CTR) framework for understanding action and reaction cycles. We use archival financial statement data on U.S. manufacturing companies from the COMPUSTAT data base for the years from 1987 to 2015 to investigate competitive responses to capacity decisions between market-leading firms and their principal competitors. We perform regression analysis on forty industries in which a market share leader and a principal challenger could be identified. This yielded 5355 observations lagged by one year from each focal firm's capacity action to the competitor's response. We find support for the hypothesis that the rival firm's capacity actions influence the competitor's capacity decisions. We did not find support for the hypotheses that the rival firm's capacity response is moderated by industry growth, leader-challenger market share gap, or industry concentration. This research extends the study of dynamic competitive response to tactical operational decisions, and informs management practice by providing insight into the potential reaction of competitors to a focal firm's capacity decisions.

Product Market Competition and Economic Performance In Sweden

OECD Economics …, 2004

Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format ECO/WKP(2004)22 Unclassified English text only ECO/WKP(2004)22 2 ABSTRACT/RESUMÉ PRODUCT MARKET COMPETITION AND ECONOMIC PERFORMANCE IN KOREA Maintaining rapid economic growth depends increasingly on productivity gains, particularly in the service sector. Competition has an important role to play in achieving such gains. However, Korea's development strategy has tended to weaken competition and has left a legacy of government intervention. Strengthening competition requires upgrading competition policy, increasing openness to international trade and foreign direct investment and improving the regulatory framework in network industries. In particular, the power of the Korea Fair Trade Commission should be expanded, while raising the level of sanctions and scaling back special treatment for certain sectors. Barriers to imports remain above the OECD average, particularly in agriculture, while the stock of inward direct investment is among the lowest in the OECD area. Restructuring plans in the network industries, notably electricity and gas, have lagged behind schedule. Price distortions and the absence of independent sectoral regulators hamper efforts to strengthen competition in network industries. In the retail sector, entry barriers make it difficult to establish large retail outlets. The paper concludes that actions in a number of areas are needed to strengthen competition, thereby sustaining rapid growth and promoting Korea's convergence to the income levels in the most advanced OECD countries.