When Perception Meets Reality: Competition Gap, Export Intensity, and Firm Performance in Transition Economies

This study examines how perceived and objective competition differentially shapes firm behavior and performance. We argue that firms primarily respond to perceived competition, which drives strategic decisions, while misalignment between perceived and objective competition (i.e., competition gap) conditions the effectiveness of those decisions. Using survey data from 26 transition economies, we test our hypotheses with OLS regression and moderated mediation analysis using generalized structural equation modeling. Results show that perceived competition is positively associated with export intensity, which is in turn positively associated with firm performance. Moreover, the competition gap positively moderates the relationship between export intensity and firm performance.