Domestic and foreign competitor identification and firm performance

Strategic management scholars agree firms need to know who they compete with in order to establish and maintain a competitive advantage. Yet we know little about the link between competitor identification and firm performance or the added value of identifying foreign competitors. In this paper, we develop and test a theory to explain how identifying domestic and foreign competitors can each lead to improved firm performance. Using a unique dataset of Taiwanese manufacturers, we find that firms identifying more domestic competitors perform better. Additionally, our results indicate that firms identifying high levels of both domestic and foreign competitors have even better firm performance. Thus, we contribute to the literature by exploring the importance of identifying domestic and foreign competitors for a firm's success.