Stock returns and product market competition: beyond industry concentration

Stock returns and product market competition: beyond industry concentration The main purpose of this paper is to provide direct evidence that product market structure affects stock returns. This is not only through industry concentration, as found in Hou and Robinson (J Finance 61:1927–1956, 2006), but also based on firms’ product substitutability and industry market size. Furthermore, the predictive power of product substitutability and market size for stock returns is not subsumed by industry concentration. Our results highlight the multi-dimensional structure of product market competition and its impact on asset prices. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

Stock returns and product market competition: beyond industry concentration

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Publisher
Springer US
Copyright
Copyright © 2010 by Springer Science+Business Media, LLC
Subject
Finance; Corporate Finance; Accounting/Auditing; Econometrics; Operation Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1007/s11156-010-0205-0
Publisher site
See Article on Publisher Site

Abstract

The main purpose of this paper is to provide direct evidence that product market structure affects stock returns. This is not only through industry concentration, as found in Hou and Robinson (J Finance 61:1927–1956, 2006), but also based on firms’ product substitutability and industry market size. Furthermore, the predictive power of product substitutability and market size for stock returns is not subsumed by industry concentration. Our results highlight the multi-dimensional structure of product market competition and its impact on asset prices.

Journal

Review of Quantitative Finance and AccountingSpringer Journals

Published: Sep 18, 2010

References

  • Real options, product market competition and asset returns
    Aguerrevere, F
  • The limitations of industry concentration measures constructed with compustat data: implications for finance research
    Ali, A; Klasa, S; Yeung, E

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