The Use of Relational Discrimination to Manage Market Entry: When Do Social Status and Structural Holes Work Against You?

Academy of Management Journal, Forthcoming

22 Pages Posted: 5 Jun 2007 Last revised: 2 Sep 2008

Abstract

This study examines how incumbent firms use relational discrimination to manage threats from market entry. The use of relationships to manage market entry implies that incumbent firms decide to collaborate with entering firms instead of incumbent firms based on the extent to which entering firms threaten their own market positions. I argue that incumbent firms seeking collaborators switch between favoring and disfavoring entering firms compared to incumbent firms depending on their social status and brokerage opportunities. A comprehensive dataset on commercial banks' entry into investment banking in the period 1991 to 1997 provides empirical support for my arguments.

Keywords: structural holes, status, networks, investment banking, discrimination, market entry

Suggested Citation

Jensen, Michael, The Use of Relational Discrimination to Manage Market Entry: When Do Social Status and Structural Holes Work Against You?. Academy of Management Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=991101

Michael Jensen (Contact Author)

University of Michigan ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

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