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Product-market competition and resource redeployment in multi-business firms

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorMorandi Stagni, Raffaele
dc.contributor.authorSantaló, Juan
dc.contributor.authorGiarratana, Marco S.
dc.contributor.funderMinisterio de Ciencia, Innovación y Universidades (España)es
dc.contributor.funderFondo Europeo de Desarrollo Regionales
dc.date.accessioned2022-05-20T15:08:43Z
dc.date.available2022-05-20T15:08:43Z
dc.date.issued2020-06-02
dc.description.abstractResearch summary This article investigates how diversified firms reallocate internal non-scale free resources when one of their product business units (BUs) experiences increased exposure to international competition driven by a sharp decrease in trade tariffs. On average, firms tend to fight, by reallocating resources toward the BU affected by the trade shock and away from other BUs within the same firm. Two variables moderate this first-order effect with opposite signs. The level of sunk costs of the assets allocated to the BU affected by the shock is a positive moderator of resource reallocation to it. The presence of technological synergies between the BU affected and the rest of BUs instead moderates the relationship negatively. This negative moderation seems to only take place when competition increases the value of technology as a competitive resource. Managerial summary An important question in the strategic decision-making process of diversified firms is how to react to competitive threats that affect one business unit but not the others. Should managers allocate more resources to the affected business or should they instead reduce their commitment and use the same resources in the remaining operating sectors? In this article, we examine firms’ reallocation decisions following increases in foreign competition due to import tariff cuts. Our results show that firms tend to allocate more resources to the business affected by the tariff cut and less to the businesses unaffected. Furthermore, we find evidence that this behavior is positively associated with performance.en
dc.description.sponsorshipRaffaele Morandi Stagni and Juan Santaló acknowledge financial support from the Spanish Ministerio de Ciencia, Innovación y Universidades (project grants PGC2018-096316-B-I00,RTI2018-097033-B-I00 and ECO2016-78980-P) and from FEDER (UNC315-EE-3636)en
dc.identifier.bibliographicCitationMorandi Stagni, R., Santaló, J., & Giarratana, M. S. (2020). Product‐market competition and resource redeployment in multi‐business firms. Strategic Management Journal, 41 (10), pp. 1799-1836.es
dc.identifier.doihttps://doi.org/10.1002/smj.3207
dc.identifier.issn1097-0266
dc.identifier.publicationfirstpage1799es
dc.identifier.publicationissue10es
dc.identifier.publicationlastpage1836es
dc.identifier.publicationtitleStrategic Management Journalen
dc.identifier.publicationvolume41es
dc.identifier.urihttps://hdl.handle.net/10016/34872
dc.identifier.uxxiAR/0000025056
dc.language.isoenges
dc.publisherWileyes
dc.relation.projectIDGobierno de España. UNC315-EE-3636es
dc.relation.projectIDGobierno de España. PGC2018-096316-B-I00es
dc.relation.projectIDGobierno de España. RTI2018-097033-B-I00es
dc.relation.projectIDGobierno de España. ECO2016-78980-Pes
dc.rights© 2020 John Wiley & Sons, Ltd.en
dc.rights.accessRightsopen accesses
dc.subject.ecienciaEmpresaes
dc.subject.otherCompetitionen
dc.subject.otherDiversificationen
dc.subject.otherOpportunity costen
dc.subject.otherPerformanceen
dc.subject.otherResource redeploymenen
dc.titleProduct-market competition and resource redeployment in multi-business firmsen
dc.typeresearch article*
dc.type.hasVersionAM*
dspace.entity.typePublication
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