SOCIAL CAPITAL AND COMPETITIVE BEHAVIOR: A STUDY OF INTER-FIRM

This paper explores how the social capital of firms, captured by cumulative alliance activity over time, affects competitive behavior. Our analysis of 704 alliances and 5,947 competitive actions of the 12 largest automakers over a 16-year time frame suggests that a firm’s diverse range of alliances in formed in previous years has a positive cumulative effect on both competitive action frequency and variety. Past alliance diversity was also related to the frequency of introducing strategic actions, but not tactical actions. We also found that alliances with rivals suppresses the tendency of these rivals ’ to quickly respond to the focal firm’s tactical actions, but not strategic actions