Spatiotemporal context and firm performance: The mediating effect of strategic interaction

Abstract

Traditional studies of firm performance typically focus on the effect of market structure and rarely consider the impact of the spatiotemporal context in industrial competition. Using a sample of 1,555 listed companies from 2015 to 2018 in China, this study shows that the profit center of gravity tends to move from southeast to northwest, and that there are negative effects on firm performance with distance from the profit center of gravity. Moreover, when controlling for organizational variables, strategic interaction at the local level significantly mediates the relationship between spatiotemporal context at the global level and firm performance at the microlevel. This investigation provides preliminary support for strategic interaction as a significant mediator between spatiotemporal context and firm performance, and further highlights the relevance of spatiotemporal context and strategic interaction in determining firm performance. The results of this study contribute to our understanding of the dynamic mechanism of spatiotemporal context affecting firm performance and the role of strategic interaction at the local level in this relationship, which can improve the existing insights into new economic geography.

Determinants of biopharmaceutical R&D expenditures in China: the impact of spatiotemporal context

“…The aforementioned empirical research results show how the spatiotemporal context of the biopharmaceutical industry at the macro level, measured by distance and time, affects the R&D expenditure of biopharmaceutical companies at the micro level. The empirical findings are consistent with the SSP theory, i.e., the spatiotemporal context will affect the behavior of biopharmaceutical companies, including R&D investment (Gu, 2021a(Gu, , 2021b(Gu, , 2020. In other words, this study supports the context-sensitive thesis.…”

Spatial Dynamics between Firm Sales and Environmental Responsibility: The Mediating Role of Corporate Innovation

“…To test this spatial spillover effect, a spatial lag of explained variable is introduced into the empirical model [82]. Here, when the spatial lag of CER performance is considered, there is a spatial spillover effect if the effect of the spatial lag is significant [83]. The CER performance of a company could be influenced positively by the CER performance in its neighboring companies [12,79].…”

“…The displacement of the center of gravity reveals the spatial dynamics of the CER game [72,74]. According to the spatiotemporal context-strategic interaction-performance (SSP) model, this spatiotemporal context will affect the CER behavior of companies through strategic interactions between neighboring companies [83].…”

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“…Figure 1 shows a graphical representation of the proposed theoretical model and the research hypotheses to be tested. The empirical test of the spatial spillover effect in Hypothesis 3 and Hypothesis 4 is mainly realized through the significance of the spatial lag term and the sign of the regression coefficient [48][49][50]. This analysis framework is set based on the spatial difference-in-differences model and can handle the following three different treatment effects: treatment effects based on patent incentive policies, spillover effects within the experimental group, and spillover effects on the control group.…”