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Article: Investment Efficiency and Product Market Competition
| Title | Investment Efficiency and Product Market Competition |
|---|---|
| Authors | |
| Issue Date | 2017 |
| Publisher | Cambridge University Press. The Journal's web site is located at http://journals.cambridge.org/action/displayJournal?jid=jfq |
| Citation | Journal of Financial and Quantitative Analysis, 2017, v. 52, p. 2611-2642 How to Cite? |
| Abstract | Does more competition lead to more information production and greater investment efficiency? This question is largely unexplored in the finance literature. This article provides both a model and a series of extensive empirical tests. The model features a 2-stage Bayesian game in differentiated products market competition. We find that competition causes firms to acquire less information and investments become more inefficient relative to a first best case with the same market structure. Empirically the panel regression analysis provides strong support for the theory and shows that investment is more efficient in concentrated industries. |
| Persistent Identifier | http://hdl.handle.net/10722/250625 |
| ISSN | 2021 Impact Factor: 4.337 2020 SCImago Journal Rankings: 4.657 |
| ISI Accession Number ID |
| DC Field | Value | Language |
|---|---|---|
| dc.contributor.author | Stoughton, NM | - |
| dc.contributor.author | Wong, KP | - |
| dc.contributor.author | Yi, L | - |
| dc.date.accessioned | 2018-01-18T04:29:56Z | - |
| dc.date.available | 2018-01-18T04:29:56Z | - |
| dc.date.issued | 2017 | - |
| dc.identifier.citation | Journal of Financial and Quantitative Analysis, 2017, v. 52, p. 2611-2642 | - |
| dc.identifier.issn | 0022-1090 | - |
| dc.identifier.uri | http://hdl.handle.net/10722/250625 | - |
| dc.description.abstract | Does more competition lead to more information production and greater investment efficiency? This question is largely unexplored in the finance literature. This article provides both a model and a series of extensive empirical tests. The model features a 2-stage Bayesian game in differentiated products market competition. We find that competition causes firms to acquire less information and investments become more inefficient relative to a first best case with the same market structure. Empirically the panel regression analysis provides strong support for the theory and shows that investment is more efficient in concentrated industries. | - |
| dc.language | eng | - |
| dc.publisher | Cambridge University Press. The Journal's web site is located at http://journals.cambridge.org/action/displayJournal?jid=jfq | - |
| dc.relation.ispartof | Journal of Financial and Quantitative Analysis | - |
| dc.rights | Journal of Financial and Quantitative Analysis. Copyright © Cambridge University Press. | - |
| dc.rights | This article has been published in a revised form in [Journal of Financial and Quantitative Analysis] [http://doi.org/10.1017/S0022109017000746]. This version is free to view and download for private research and study only. Not for re-distribution, re-sale or use in derivative works. © copyright holder. | - |
| dc.title | Investment Efficiency and Product Market Competition | - |
| dc.type | Article | - |
| dc.identifier.email | Wong, KP: kpwongc@hkucc.hku.hk | - |
| dc.identifier.authority | Wong, KP=rp01112 | - |
| dc.description.nature | postprint | - |
| dc.identifier.doi | 10.1017/S0022109017000746 | - |
| dc.identifier.scopus | eid_2-s2.0-85039993423 | - |
| dc.identifier.hkuros | 284010 | - |
| dc.identifier.volume | 52 | - |
| dc.identifier.spage | 2611 | - |
| dc.identifier.epage | 2642 | - |
| dc.identifier.isi | WOS:000418759500009 | - |
| dc.publisher.place | United Kingdom | - |
| dc.identifier.issnl | 0022-1090 | - |