Empirical analysis reveals that rival cues drive resource acquisition choices in global biopharmaceutical firms, suggesting competitive actions shape factor market strategies.
Key Points
To investigate how rivals' activities and information in strategic factor markets shape a firm's decision to acquire external resources versus building internal capabilities.
Formulated a theoretical framework modeling how informational cues and competitive pressure trigger herding and strategic factor choices.
Analyzed an empirical dataset of new product development initiatives among global biopharmaceutical firms from 1993 to 2018.
Competitor moves in factor markets generate information and competitive pressure that trigger herding responses across three distinct rival action types.
The interaction between informational cues and rivalry pressure dictates whether firms pick external resources from factor markets or invest in developing internal capabilities.