Vertical cooperation and coopetition of incumbents under the new energy substitute: Evidence from Chinese automobile industry

The rise of new-energy technology innovations disrupts traditional manufacturers by playing rival threats of cross-sector entering, damaging social Pareto Optimal. While existing literature ignores the possibility of coopetition between incumbent and entrant, this research explores that, under disruptive entering of new energy, the influence of the vertical cooperation by the incumbent on the achievement of coopetition between incumbent and entrant. With data from 83 Chinese traditional automobile public corporations during 2011-2019, we find that vertical integration in both directions (upstream and downstream), building the non-counterpart competitive advantages of resources dominants and final-demand accessing, helps incumbents to achieve coopetition with entrants. But with ambidextrous cooperation behavior, only the relationship between upstream integration and coopetition is leveraged. This research provides a brand-new approach of coopetition into the survival and sustainability of traditional enterprises under new-energy technology innovations and forms a theoretical foundation of promoting new-energy revolution by market economic behavior. Traditional automobile enterprises (as incumbents) pursuing upstream integration with ambidextrous cooperation can help achieve coopetition with entrants. Technological innovation can be attained by vertical cooperation and coopetition. It can provide the idea of rivalry-coopetition and sustainable development strategy and lays a theoretical foundation of market economics for promoting the new-energy revolution.

Automated summary

This research explores the impact of new energy technology innovations on traditional manufacturers, and proposes the concept of vertical cooperation and coopetition. The study finds that upstream integration and ambidextrous cooperation play a crucial role in achieving coopetition between incumbents and entrants.