Abstract
Firms often engage in interfirm coopetitionthe paradoxical pursuit of cooperation and competitionto unlock greater value than what either cooperation or competition alone can offer. However, coopetition can also undermine performance due to its inherent paradoxical nature. While prior research acknowledges these dual effects, it remains fragmented and ambiguous about the specific capabilities required to navigate coopetition’s complexities. Drawing on five studies and paradox theory, we develop and validate coopetition navigation, a three-dimensional construct comprising analytical, emotional, and balancing dimensions, and propose it as the core mechanism through which firms can harness coopetition to enhance performance. Study 1 (n = 46) integrates qualitative interviews and a literature review to generate an initial item pool. Study 2 (n = 12) refines the scale through expert evaluation. Studies 3 and 4 (n = 225; n = 418) establish the construct’s dimensionality, reliability, and validity. Finally, Study 5 uses a time-lagged design based on study 3’s sample 4 to show that coopetition navigation fully mediates the inverted U-shaped relationship between coopetition and performance by constraining vicious cycles, reinforcing virtuous cycles, and ultimately driving performance. We advance coopetition and paradox research by offering both theoretical insights and practical guidance for firms navigating the paradoxical challenges of coopetition.