Competitive aggressiveness, community banking and performance

Abstract

Purpose The purpose of this paper is to develop and empirically test a conceptualization of competitive aggressiveness (CA), a dimension of entrepreneurial orientation. Design/methodology/approach Structural equation modeling and hierarchical regression are employed on responses from 182 banks in the southwestern US Performance data on the banks are drawn from the US Federal Deposit Insurance Corporation's (FDIC's) Call reports. Findings The results indicate awareness, motivation and capability are antecedents of CA, which itself is positively related to increased market share and, in more dense markets, profitability. Practical implications Aggressive firms exhibit certain routines that can lead to competitive actions, which assists performance in some contexts. Managers who wish to increase (or decrease) their firms' overall competitive posture can encourage (or discourage) employees from performing competitive routines such as monitoring their rivals or talking about their rivals' strategies. Originality/value By developing CA' conceptualization, the study advances the understanding of the antecedents of competitive behavior and makes it easier to study competition in smaller firms.