Potential Coopetition and Productivity among European automobile Plants

© Springer International Publishing AG 2016. The chapter proposes a definition of the potential economic incentives for competitors to cooperate with each other, namely coopetition. A non-parametric methodological approach based on the rate of return on assets (ROA), a well-known measure of financial performance, enables comparison between non-coopetition and coopetition statuses. The potential ROA gains from competition are decomposed by economic drivers. This methodology was applied to the study at plant level, focusing on cases of potential competition in the European automotive industry. The main results are based on an analysis of a generated sample of over forty-five thousand cases of potential cooperation between plants in the 2000–2012 period. Out of that sample, roughly twelve thousand cases (about 27%) presented potential ROA gains from coopetition. Results show that faster asset turnover and better productivity explain a higher potential ROA from coopetition. Results also reveal that medium–small and small plants have the strongest economic incentive for coopetition. The chapter concludes by offering some policy recommendations concerning the introduction of changes to the legal framework of competition, in the context of the European Union.