Competing in Emerging Markets: Performance Implications of Competitive Aggressiveness

A firm is said to have a high degree of ‘competitive aggressiveness’ if it forcefully takes a large number and a large variety of actions to outperform its competitors in the marketplace. Competitive dynamics scholars have shown that firms with a high degree of competitive aggressiveness experience better profitability and a greater market share than firms that carry out a narrow, simple repertoire of actions. Still, most empirical studies have been conducted within the marketplace of developed countries. There is a lack of evidence testing the competitive aggressiveness–performance relationship from the perspective of firms based in developed countries entering and competing in emerging economies. Given the highly competitive and rapidly changing environments that developed country-based firms have to cope with when entering certain emerging economies, various authors have recently argued the analysis of this unexplored relationship to be an apt research issue. This paper tests the competitive aggressiveness–performance relationship with a sample of 90 Italian firms entering and competing in the Chinese market within the 2001–2010 time period. The results show that there is a positive relationship between a firm’s competitive aggressiveness in an emerging economy and its performance, that this relationship is negatively moderated by the entry mode degree of control, and that the moderating effect of the extent to which the firm’s industry within the emerging economy is affected by institutional voids is not significant.