Owning to its focus on the competitive intensity between firms across both product and resource markets, the theory of factor-market competition (FMC) sparked interest among strategy scholars who study the drivers, processes, and outcomes related to inter-firm competition. Yet, despite some initial theoretical advancement, little progress has been made in this potentially important research stream. In this study, we empirically explore elements of relational rivalry between firms (explicit rivalry, capability to compete, and status similarity) drive the intensity of FMC. Using the market for high school recruits among National Collegiate Athletic Association (NCAA) football teams as our research setting, we show that these psycho-social aspects of relational rivalry (as well as some product-market based structural aspects) indeed drive FMC. Further analysis reveals that the nature of these relationships is contingent on another underexplored element of FMC: factor quality. As such, our study is an early test of the theory of FMC, a refinement of the theory to account for resource properties, and an extension beyond structural aspects into the role of relational rivalry on the intensity of FMC.
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