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Faculty & Research


Co-opetition and the Firm’s Information Environment

Journal Article
Some firms in the technology sector choose to cooperate with competitors (“co-opetition”) in Standard Setting Organizations (SSOs). These SSOs create technology standards that facilitate rapid market penetration of new technologies such as Wi-Fi, Bluetooth, and 4G. Active participation in the standard setting process requires the exchange of proprietary information with competitors. While the goal of such information sharing is to further a technology or a market, firms potentially receive an unintended benefit from access to competitor and industry information. The authors examine whether active SSO participation enhances a firm’s information set and allows managers to better predict future sales. Conducting within-firm analyses, the authors find that the centrality of a firm’s location within the network of SSO collaborators is positively related to the accuracy of the firm’s sales forecasts. This relation is stronger when firms share more information with direct competitors, when forecasting is more difficult ex ante, and when firms forecast over longer horizons. The authors' findings show that collaborating with competitors in the product market provides an important unintended benefit of improving the manager’s information set.

Assistant Professor of Accounting and Control