Competition Shocks, Rival Reactions, and Stock Return Comovement
研究关税削减带来的竞争冲击如何影响行业内对手企业的股票收益联动，发现对手企业倾向于采取成本削减策略而非产品差异化，导致收益联动增强。
Abstract To protect inframarginal rents, rivals react to competition shocks by increasing product differentiation or lowering costs by standardizing products and production processes. We test these two mutually exclusive reactions by exploiting changes in rivals’ idiosyncratic stock return comovement following significant tariff cuts. While increased product differentiation implies a reduction in return comovement, greater standardization implies the opposite (a comovement increase). Difference-in-differences (DID) tests indicate that tariff cuts cause a significant increase in return comovement—in particular among within-industry “followers.” Treatment effects on cash flows, product counts, similarity scores, and business segment counts further support cost-cutting strategies.