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...

This study investigates whether product market competition reduces agency problems between controlling shareholders and minority shareholders in Japan. We study Japan because of its salient weakness in investor protection and the severity of agency conflicts. In a large sample of Japanese firms we find that Japanese firms in more competitive industries pay more dividends than firms in less comp...

Classical models of product market competition maintain that firms maximize their profits regardless of their financial condition. Yet over the last two decades a growing theoretical literature has examined whether a firm’s capital structure impacts competition in the market for the firm’s products. In this paper we ask whether a firm operating under bankruptcy protection significantly reshapes...

I analyze an original dataset on the display inventories of several hundred eyewear retailers to study how firms’ product-range choices depend on separation from rivals in geographically-differentiated markets. A two-stage estimation approach is used, employing Seim’s (2002) structural entry model for firms’ first-stage location choices, followed by reduced-form store-level variety regressions....

This paper investigates the interaction between product market competition and managers’ decision to distribute cash to shareholders. Using a large sample of manufacturing firms, we find that firms in more competitive industries pay more dividends than firms in less competitive markets. Further, consistent with agency theory, we find that the effect of product market competition on corporate pa...

We examine how product similarity and competition influences mergers and acquisitions and the ability of firms to exploit product market synergies. Using novel text-based analysis of firm 10K product descriptions, we find three key results. (1) Firms are more likely to enter restructuring transactions when the language describing their assets is similar to all other firms, consistent with their...

IMPERFECT competition is a pervasive part of modern industrial economies, where high levels of concentration in product markets often coexist with unionised labour markets. Most standard macroeconomic models, however, assume that markets are perfectly competitive. This paper provides a simple framework in which we are able to explore some of the implications of imperfect competition for the mac...

This paper models the interactions among technological innovation, product market competition and information leakage via the stock market. There are two …rms who compete in a product market and have an opportunity to invest in a risky technology either early on as a leader or later once stock prices reveal the value of the technology. Information leakage thus introduces an option of waiting, w...

As a matter of course, power market uncertainties escalation is by product of power industry restructure on one hand and the unrivalled penetration of renewable energies on the other. Generally, the decision making process in such an uncertain environment faces with different risks. In addition, the performance of real power markets is very close to oligopoly markets, in which, some market play...

There is a widespread sense that over the last two decades firms have been decentralizing decisions to employees further down the managerial hierarchy. Economists have developed a range of theories to account for delegation, but there is less empirical evidence, especially across countries. This has limited the ability to understand the phenomenon of decentralization. To address this empirical ...