Crowded home: Competitive positioning, internationalization, and firm performance

Prior literature has long established that firm performance depends on competitive positioning. While plausible, most studies on competitive positioning conceptualize that firms compete within a single, bounded marketspace (e.g., a country or industry). This approach, however, downplays firms' heterogeneous market expansion, which can largely reshape the returns to competitive positioning. To underscore the important role of market expansion, we specifically examine how firms' international expansion moderates the relationship between competitive similarity and performance. Analyzing a large sample of US firms from 1997 to 2017, we find support for our core claim: The adverse impact of competitive similarity on firm performance is alleviated when a firm has a greater level of international presence. We further observe that the negative impact is mitigated (albeit more marginally) when a firm's competitors are more international. These findings make important contributions to research on competitive positioning and international business.