Unraveling when and how marketing capability shapes product market competition: the moderating effect of slack resources and external environment

While previous research has extensively examined the impact of marketing capability on financial performance, its influence on competition threats within product markets under varying conditions remains less understood. Through the lens of the resource-based view (RBV), this study investigates how organizational slack resources and environmental characteristics moderate the effects of marketing capability on product market competition, which is measured using market fluidity derived from firms’ 10-K filings. By analyzing a comprehensive panel dataset of 53,165 firm-year observations over 24 years, we extend RBV by showing that marketing capability not only improves performance but also re-shapes the firm’s competitive environment by reducing product market threats. Furthermore, we find that slack resources enhance the relationship between marketing capabiltiy and reduced competition. Additionally, environmental munificence strengthens, while environmental turbulence weakens, the competition-reducing effect of marketing capability. These findings offer valuable theoretical and practical insights for firms seeking to leverage marketing capability to navigate competitive landscapes.