Competitive parity, status disparity, and mutual forbearance

Securities analysts' competition for investor attention

Anne H. Bowers, Henrich R. Greve, Hitoshi Mitsuhashi, Joel A C Baum

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

Most studies of responses to change in competitive environments focus on competitorspecific adaptations. However, rivals are often acutely aware of one another, and this awareness should influence their competitive behavior. In this study, we focus on three market structures that affect competitive behavior: competitive parity, status disparity, and multipoint contact. In particular, we examine how securities analysts responded to a regulatory discontinuity, Regulation Fair Disclosure (Reg-FD), which promotes competitive parity by eliminating privileged access to proprietary firm information as a critical source of competitive advantage. We predict and find that Reg-FD activated mutual forbearance among analysts linked through multipoint contact. We also predict and find that high-status analysts forbear more strongly. Analysts' responses to heterogeneity in competitive advantage thus depend importantly on their competitive overlap and status, which has implications for both their behavior and the information they provide to investors.

Original languageEnglish
Pages (from-to)38-62
Number of pages25
JournalAcademy of Management Journal
Volume57
Issue number1
DOIs
Publication statusPublished - 2014 Feb 1

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Investors
Security analysts
Parity
Mutual forbearance
Analysts
Competitive advantage
Regulation fair disclosure
Competitive behavior
Competitive environment
Market structure
Discontinuity

ASJC Scopus subject areas

  • Business and International Management
  • Management of Technology and Innovation
  • Strategy and Management
  • Business, Management and Accounting(all)

Cite this

Competitive parity, status disparity, and mutual forbearance : Securities analysts' competition for investor attention. / Bowers, Anne H.; Greve, Henrich R.; Mitsuhashi, Hitoshi; Baum, Joel A C.

In: Academy of Management Journal, Vol. 57, No. 1, 01.02.2014, p. 38-62.

Research output: Contribution to journalArticle

Bowers, Anne H. ; Greve, Henrich R. ; Mitsuhashi, Hitoshi ; Baum, Joel A C. / Competitive parity, status disparity, and mutual forbearance : Securities analysts' competition for investor attention. In: Academy of Management Journal. 2014 ; Vol. 57, No. 1. pp. 38-62.
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