Drawing from core ideas in competitive dynamics and information processing theory, this study explores the relationship between competitive strategy and stock risk. It is predicted that three properties associated with the firm's competitive action repertoire - conformity, stability, and simplicity - influence investors/observers' information processing fluency which, in turn, influences stock risk. The hypotheses are tested on a sample of market-leading firms across multiple industries over a seven-year time panel. Findings suggest that firms with lower levels of stock risk carry out competitive action repertoires that are similar to that of rivals, familiar to investors, and simple.
|Number of pages||15|
|Journal||Journal of Managerial Issues|
|State||Published - Mar 1 2014|
Bibliographical notePublisher Copyright:
Copyright © 2014 The Journal of Chinese Medicine.
ASJC Scopus subject areas
- Management Information Systems