Analysis of the effects of task environment and firm’s market power on competitive position of brazilian firms
DOI:
https://doi.org/10.5902/1983465968594Keywords:
Task Environment, Market Power, Competitive Position, 2008 Financial CrisisAbstract
Purpose: The study aims to analyze the effects that task environment and firm’s market power exerts on Brazilian firm’s competitive position, during the period of 2012 to 2017, which encompasses the effects of the 2008 crisis.
Design/methodology/approach: We used Partial Least Squares path modeling when estimating the effects of competitive environment and market power on a firm’s competitive position, considering the effects of time. The size of firm was used as a weighting factor. The sample is comprised by manufacturing industry Brazilian publicly traded firms, active in the period 2012 to 2017.
Findings: The capacity of firms to achieve and sustain a favorable competitive position is directly dependent on the degree of market power they own. Under a reactive managerial point of view, managers should make strategic choices that allow the firm to stay close to consumers, to maintain and reinforce market power, avoiding reductions in market share. Under a proactive managerial point of view, managers should take advantage of market power by building barriers that would make it difficult for competitors to have access to consumers.
Originality/value: This research brings two original contributions. The first one is the identification of the determining factors of the competitive position of Brazilian firms, during the period after the 2008 financial crisis. The second one is the proposition and test of a structural equations model to estimate the effects of market power and task environment on firm’s competitive position.
Downloads
References
Brito R. P., & Brito L. A. L. (2012) Vantagem Competitiva, criação de valor e seus efeitos sobre o desempenho. Revista de Administração de Empresas, 52(1), 70-84.
Bhuyan, S. (2020) Is There Market Power in the U.S. Brewing Industry? European Journal of Applied Economics, 17(1), 67–79.
Child, J. (1974) What determines organization performance? The universals vs. the it all depends. Organizational Dynamics, 3(1), 2–18.
Child, J. (1975) Managerial and organizational factors associated with company performance Part II: A contingency analysis. Journal of Management Studies, 12(1–2), 12–27.
Coccia, M. (2017) Sources of technological innovation: Radical and incremental innovation problemdriven to support competitive advantage of firms. Technology Analysis & Strategic Management, 29(9), 1048-1061.
Czarnitzki, D., & Toole, A. A. (2013) The R&D Investment–Uncertainty Relationship: Do strategic rivalry and firm size matter? Managerial and Decision Economics, 34(1), 15-28.
De-Carvalho, J. P., Dias, A. T., & Rossi, F. S. M. (2018) Efeitos da Munificência no Desempenho da Firma. Revista Ciências Administrativas, 24(1), 1-12.
Dess, G. G., & Beard, D.W. (1984) Dimensions of Organizational Task Environments. Administrative Science Quarterly. 29(1), 52 – 73.
Dias, A. T., Rossi, F. S. M., Silva, J. T. M., Camargos, M. C., & De-Carvalho, J. P. (2020) The Effects of Competitive Environment and Strategic Factors on US Firm Performance Before and After the Global Financial Crisis. Latin American Business Review, 21(1), 37-59.
Dias, A. T., Sousa, E. J. R. G., Silva, J. T. M., & Silva, W. A. C. (2020) Analysis of the Effects of Rivalry and Dynamism on the Firm’s Competitive Position. BBR – Brazilian Business Review, 17(4), 362-380.
Faul, F., Erdfelder, E., Buchner, A., & Lang, A. G. (2009) Statistical power analyses using G*Power 3.1: Tests for correlation and regression analyses. Behavior Research Methods, 41(4), 1149-1160.
Hair, J. F., Hult. T. M., Ringle, C. M., & Sarstedt, M. (2014) A primer on Partial Least Squares Structural Equations Modeling (PLS-SEM). Los Angeles: SAGE.
Hamza, K. M., Saab, A. B., & Rodrigues Filho, L. N. (2012) Relação entre rivalidade e preços, e suas implicações para a estratégia competitiva. Revista Gestão & Regionalidade, 28(83), 65-79.
IBGE (2022) Sistema de contas nacionais trimestrais. Available at https://www.ibge.gov.br/estatisticas/economicas/contas-nacionais/
Jhang, S.-S. (Sherwin), Lin, W. T., & I-Hsuan Fang. (2020) How does firms’ integrated market power affect upstream trade credit and institutional ownership? Evidence from Taiwan. Asia Pacific Management Review, 25(2), 75–86.
Kaplow, L. (2015) Market definition, market power. International Journal of Industrial Organization, 43, 148-161.
Kunc, M., & Bhandari, R. (2011) Strategic development processes during economic and financial crisis. Management Decision, 49(8), 1343-1353.
Latham, S., & Braun, M. (2011) Economic recessions, strategy, and performance: a synthesis. Journal of Strategy and Management, 4(2), 96-115.
Lelissa, T. B., & Kuhil, A. M. (2018) The Structure Conduct Performance Model and Competing Hypothesis- A Review of Literature. Research Journal of Finance and Accounting, 19(1), 76-89.
Li, M., & Simerly, R. L. (1998) The moderating effect of environmental dynamism on the ownership and performance relationship. Strategic Management Journal, 19, 169–179.
Loecker, J. D., Eeckhout, J., & Unger, G. (2020) The Rise of Market Power and the Macroeconomic Implications. Quarterly Journal of Economics, 135(2), 561–644.
Lumpkin, G. T., & Dess, G. G. (2001) Linking two dimensions of entrepreneurial orientation to firm performance: the moderating role of environment and industry life cycle. Journal of Business Venturing, 16, 429-451.
Mas-Ruiz, F., & Ruiz-Moreno, F. (1993) Rivalry within strategic groups and consequences for performance: the firm-size effects. Strategic Management Journal, 32, 1286–1308.
Mendonça, E. C., & Lima, M. A. M. (2009, May) Estrutura de mercado e desempenho na indústria de transformação brasileira: uma análise utilizando medidas diretas de eficiência. Eventos Realizados IPEA, Rio de Janeiro, RJ, Brasil.
Moen, Ø. (1999) The Relationship Between Firm Size, Competitive Advantages and Export Performance Revisited. International Small Business Journal: Researching Entrepreneurship, 18(1), 53-72.
Oh, H, & Thomas, R J. (2013) A method for identifying market power. Decision Support Systems, 54(3), 1348-1356.
Patel, E., & Seegert, N. (2020) Does Market Power Encourage or Discourage Investment? Evidence from the Hospital Market. Journal of Law & Economics, 63(4), 667–698.
Pereira, J. A., & Bánkuti, S. M. S. (2016) Estrutura de Mercado e Estratégia: um Estudo na Indústria Brasileira de Baterias Automotivas. Revista Ibero-Americana de Estratégia, 15(1), 97-115.
Peteraf, M, & Barney, J. (2003) Unraveling the Resource-Based Tangle. Managerial and Decision Economics, 24, 309-323.
Posner, R A. (2000). Antitrust in the New Economy [Olin Working Paper No. 106]. University of Chicago Law & Economics, Chicago, USA.
Priem, R. L. (2007) A consumer perspective on value creation. Academy of Management Review, 32(1), 219-235.
Ringle, C. M., Wende, S., & Becker, J.-M. (2015) “SmartPLS 3.” Boenningstedt: SmartPLS GmbH, http://www.smartpls.com.
Sener, I. (2012) Strategic Responses of Top Managers to Environmental Uncertainty. 8th International Strategic Management Conference. Procedia - Social and Behavioral Sciences, 58, 169 – 177.
Simerly, R. L., & Li, M. (2000) Environmental Dynamism, Capital Structure and Performance: A Theoretical Integration and an Empirical Test. Strategic Management Journal, 21, p. 31–49.
Tan, P. (2019) How does context dynamism and pressures from competition affect firms’ strategic emphasis on innovation? Management & Applied Economics Review, 32(1), 1–7.
Teixeira, A. C. (2017) Análise de condutas unilaterais anticoncorrenciais da nova economia: os desafios da intervenção antitruste no caso de exercício abusivo de posição dominante em negócios baseados na internet. Dissertação (Pós-Graduação em Direito) - Faculdade de Direito da Universidade Federal de Minas Gerais, Belo Horizonte, MG, Brazil.
Thepot, F. (2013) Market Power in Online Search and Social Networking: A Matter of Two-Sided Markets. World Competition, 36(2), p. 195–222.
Wang, Y., & Li, S. (2021) Market Concentration, Market Power, and Firm Growth of Construction Companies. Advances in Civil Engineering, 1–9.
World Bank (2022) Lending Interest Rate. Available at https://data.worldbank.org/indicator/FR.INR.LEND?end=2017&locations=BR&start=2012
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Revista de Administração da UFSM
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors of articles published by ReA/UFSM retain the copyright of their works, licensing them under the Creative Commons (CC-BY 4.0), which allows articles to be reused and distributed without restriction, provided that the original work is properly cited.
