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臺大管理論叢
第
27
卷第
3
期
9
strategic position by incrementally improving the leaderʼs process (i.e., process
improvement) and/or radically creating a new one (i.e., process innovation). In the model,
we take the follower firmʼs viewpoint to examine the causal mechanism through which the
follower recognizes the leader’s best practice, and then imitates and develops it.
The model was formulated in continuous time as a set of nonlinear differential
equations as do Sterman et al. (2007) and Rahmandad (2012). To justify our model, we
present the theoretical foundations and empirical evidence for the proposed causal
relationships with each model equation.
4.1 Awareness: Multimarket Contact
The literature on multimarket competition suggests that firms interacting across
multiple markets are familiar with each other’s mindset and action patterns (Gimeno and
Woo, 1996; Tsai et al., 2011). Therefore, the follower firm’s awareness is expected to
increase with market commonality, $M$, defined as the degree of its presence in the
common markets (Chen, 1996). Market commonality serves as a state variable in our model
with a 0 to 1 range, increases in Entry into Rival’s Markets,
I
, and decreases in Withdrawal
from Common Markets,
E
:
dM⁄dt = I – E
.
(1)
When firms competes in common markets they create substantial deterrent effect
because the firms establish a mutual foothold,
f
, to signal their ability to enter into each
otherʼs markets (Baum and Korn, 1999). Consequently, they are less likely to be forced to
exit the common markets due to mutual forbearance. Specifically, the multimarket contact
literature has identified a curvilinear relationship between multimarket contact and market
entry/exit with a diminishing increase rate (Gimeno and Woo, 1996; Baum and Korn, 1999).
Therefore, we assume a logarithmic relationship between market commonality and the
followerʼs established mutual footholds in the model:
E =
1 ⁄
(a
1
‧
f
‧
t
w
)
,
(2)
f
= ln(
M
+
a
2
),
(3)
where
a
1
and
a
2
are set at constant to ensure that market commonality is within the 0 to
1 range, and
t
w
is the average time spent by the follower to withdraw from one market.