Product Market Competition and Industry Returns
研究发现产品市场竞争通过两个相反渠道影响资产回报：竞争加剧降低系统性风险暴露，但利润收窄增加风险暴露，且前者主导，因此竞争更激烈的行业资产回报更低。
This paper shows that product market competition has two opposing effects on asset returns. The first relates to the pro-cyclical nature of the value destruction from expansion of competitors, which lowers exposure to systematic risk in more competitive industries. The second is related to the narrower profit margins due to competition, which increase exposure to systematic risk. We find that the first effect dominates the second, so that firms in more competitive industries generally earn lower asset returns. Our results are robust to using five alternative measures of competition and to controlling for the sample selection bias of publicly-listed firms.