The role of top management teams' functional background diversity in firms' coopetitive behavior

Since the proliferation of coopetition among prominent business players, inter-firm coopetition has gained increasing academic and public attention. Yet aspects on the management and team levels remain underexplored-despite the advancements in coopetition research. This study focuses on top management teams (TMTs) as pivotal players in firms' strategic decisions, particularly in the context of coopetition. We posit that TMT functional background diversity positively influences inter-firm coopetition, fostering the intensity of competition and cooperation in inter-firm coopetition. Using a dataset of 1698 alliances among 334 that were listed at least once in the Standard and Poor's 500 index (S&P 500) from 2005 to 2020, our findings reveal that TMT functional background diversity promotes inter-firm coopetition. Further, we highlight the positive association between TMT functional background diversity and competitive intensity in coopetition while elucidating the surprisingly negative effect of TMT functional background diversity on cooperation intensity in coopetition. This study enriches our understanding of coopetition dynamics and emphasizes the crucial role of TMTs functional backgroud diversity in shaping these strategic inter-firm relationships, therefore offering valuable insights for theory and practice.