Balancing Formal and Informal Governance Mechanisms in Vertical Coopetition: Insights from a Unique Case Study

Abstract Book of the 10th International Conference on Advanced Research in Management, Business and Finance

Year: 2026

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Balancing Formal and Informal Governance Mechanisms in Vertical Coopetition: Insights from a Unique Case Study

Sahar Ayadi

ABSTRACT:

Vertical coopetition—where firms simultaneously collaborate and compete across different tiers of the value chain has emerged as a critical study. Unlike horizontal coopetition, conventional subcontracting or B2B relationships, vertical coopetition generates complex interdependencies that require hybrid governance arrangements. Building on a systematic literature review, multiple industry cases, and an exploratory SME case study, this article identifies and categorizes the formal, informal, and transactional governance mechanisms firms wich are used to manage the paradox of coopetition. The findings reveal that performance outcomes in vertical coopetitive relationships are related to aligning governance modes with power asymmetries, resource criticality, and sector-specific contingencies. Our objective in this study is to provide an integrated definition of vertical coopetition. A central contribution in the litterature of coopetition is to clearly distinguish between this three similar joint growth strategies: vertical coopetition, subcontracting, and conventional B2B relationships. By clarifying these boundaries and highlighting the governance mechanisms and strategic conditions that sustain vertical coopetition, this research advances both a framework for analyzing vertical coopetition and practical insights into how firms can strengthen competitiveness and resilience in global value chains.

Keywords: Vertical Coopetition; Inter-organizational Governance; Competitiveness; Value Creation