COOPERATION BETWEEN COMPETITORS IN SITUATIONS THAT AFFECT COMPETITIVE ADVANTAGE: A CASE STUDY OF THE JAPANESE CEMENT INDUSTRY

Abstract

 This study examines the effects of future competitive relationships on corporate cooperative behavior when competitors aim to cooperate to achieve common interests. It is difficult for competitors to maintain cooperation because these firms also have a motivation to act opportunistically at the same time. Previous studies examine the conditions for maintaining cooperation by considering the choice between cooperation and competition and the factors that affect the degree of cooperation and competition.

 However, when cooperation and competition exist simultaneously, they interact. Therefore, it is not possible to determine the conditions for maintaining cooperation without considering the interaction between them. In particular, it is important to examine the impact of the future competitive relationships that firms assume when they currently engage in cooperative behavior. This is because firms face the possibility of competing with partner firms with which they should cooperate. Firms, therefore, make decisions on current cooperation considering the impact on their competitive advantage in the future.

 This study analyzes the case of tacit collusion in the Japanese cement industry from 1998 to 2007 and examines the influence of future competitive relationships on the current cooperative behavior. Thus, if a firm trying to cooperate with competitors can gain some benefit from doing so at that time, but thinks cooperation will negatively impact its competitive advantage in the future, the firm may not take cooperative action.

 With this in mind, it is necessary for firms that seek cooperation with competitors to consider whether or not their actions affect not only their own competitive advantage, but also that of the other firms that should build cooperation.