Financing Constraints, Product Market Competition, and Business Cycle Sensitivity

Product Market Competition and the Financing of New Ventures

This paper examines the interaction between venture risk, product market competition and entrepreneurs’ choice between bank …nancing and venture capital (VC) …nancing. Under bank …nancing, a debt-type contract emerges as optimal, which allows the entrepreneur to retain full control of the venture and thus yields strong e¤ort incentives, as long as she can service the debt repayment; but leads t...

Market Performance and Competition: A Product Life Cycle Model

The paper introduces a new simulation model of market dynamics by integrating several concepts of evolutionary economics. In the course of market evolution various changes take place of which the emergence of consumers’ preferences and of the knowledge that is needed to meet these preferences with appropriate products are the most important ones. In order to model the market evolution and the r...

Product Market Competition and Stock Market Efficiency

How does competition in a firm's product market affect the behavior of its stock? We examine this question in a noisy rational expectations economy in which firms operate under monopolistic competition. Production is subject to productivity shocks and requires capital, raised on a perfectly competitive equity market. Investors observe firms' past profits and collect private information about th...

Corruption and Product Market Competition∗

It is generally considered that more competition might help curb corruption, as rents, which motivate corrupt agreements, are decreasing in the degree of competition. This paper proposes a framework to analyze the relationship between corruption and competition. It studies the optimal incentive scheme for potentially corrupt officials in charge of inspecting firms that compete in the product ma...

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