Coopetition in a regulated industry: coordinative regulation-making to form competitive actions in the Japanese automotive industry

This study explores how firms engage in ‘coopetition’ (simultaneous competition and cooperation for value creation) within an industry governed by regulations and characterised by stable inter-firm relationships. Applying an interaction perspective, this research examines the dynamics between coopetitors and regulators, focusing on the development and regulation of Automatic Emergency Braking Systems in the Japanese automotive industry from 2009 to 2021. Drawing on an analysis of newspaper articles and regulatory records, the study uncovers the competitive actions of 111 industry participants alongside their collaborative efforts in regulatory formation. The longitudinal time-series analysis demonstrates the temporal synchronisation between private-sector coopetition and joint regulation-making activities. Competitors cooperate with government agencies to coordinate competition when introducing a new technology into the industry. This study identifies a ‘spiral loop’ of unidirectional and bidirectional interactions that fosters coopetition without altering established relationships or tensions. While the existing literature often portrays regulation as a top-down, one-way process, this study emphasises the importance of viewing regulation as a bidirectional interaction between public and private actors. Understanding these mechanisms provides valuable insights for managers of established firms and startups, as well as policymakers seeking to introduce new technology into regulated industries.