Download or read book Credit Market Structure and Product Market Competition written by Lars Jebjerg and published by . This book was released on 1999 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Trade Credit and Product Market Competition written by Anne-France Delannay and published by . This book was released on 2002 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial structure may affect output market competition. This paper analyses the strategic role played by trade credit in the determination of firms' competitive position. In a market structure in which trade relations between suppliers and retailers are governed by exclusive distribution, we show that trade credit may reduce conflicts of interest between shareholders and debt holders, and make firms compete less aggressively in the output market. We verify the empirical relevance of this strategic explanation of trade credit extension, with a sample of 40,000 couples of suppliers and clients.
Download or read book Product Market Competition and Collateralized Debt written by Vittoria Cerasi and published by . This book was released on 2013 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a model where bank credit depends upon borrowersņ' product market structure. We show that a larger number of competitors in the industry may increase credit availability by enhancing the resale value of the collateralized productive assets. We also study how this benefiijt of competition is affected by the existence of outsiders willing to bid for the collateralized productive assets of the insiders. Our model encompasses the standard case of Cournot competition either when the default probability goes to zero or when there are multiple outsiders bidding for the productive assets. We test the empirical implications of the theoretical analysis exploiting information on the access to ጿinance of small and medium Italian fiijrms and fiijnd supportive evidence.
Download or read book Credit Market Competition and the Nature of Firms written by Nicola Cetorelli and published by . This book was released on 2009 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Empirical studies show that competition in the credit markets has important effects on the entry and growth of firms in nonfinancial industries. This paper explores the hypothesis that the availability of credit at the time of a firm's founding has a profound effect on that firm's nature. I conjecture that in times when financial capital is difficult to obtain, firms will need to be built as relatively solid organizations. However, in an environment of easily available financial capital, firms can be constituted with an intrinsically weaker structure. To test this conjecture, I use confidential data from the U.S. Census Bureau on the entire universe of business establishments in existence over a thirty-year period; I follow the life cycles of those same establishments through a period of regulatory reform during which U.S. states were allowed to remove barriers to entry in the banking industry, a development that resulted in significantly improved credit competition. The evidence confirms my conjecture. Firms constituted in post-reform years are intrinsically frailer than those founded in a more financially constrained environment, while firms of pre-reform vintage do not seem to adapt their nature to an easier credit environment"--Abstract page.
Download or read book Asymmetric Information and the Market Structure of the Banking Industry written by Mr.Giovanni Dell'Ariccia and published by International Monetary Fund. This book was released on 1998-06-01 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper analyzes the effects of informational asymmetries on the market structure of the banking industry in a multi-period model of spatial competition. All lenders face uncertainty with regard to borrowers’ creditworthiness, but, in the process of lending, incumbent banks gather proprietary information about their clients, acquiring an advantage over potential entrants. These informational asymmetries are an important determinant of the industry structure and may represent a barrier to entry for new banks. The paper shows that, in contrast with traditional models of horizontal differentiation, the steady-state equilibrium is characterized by a finite number of banks even in the absence of fixed costs.
Download or read book Competition in Credit Markets written by Michael Troege and published by Deutscher Universitätsverlag. This book was released on 2001-09-27 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Michael Tröge develops game-theoretic and auction-theoretic models for the strategic interaction of banks in the credit market.
Download or read book Market Evolution written by Arjen van Witteloostuijn and published by Springer Science & Business Media. This book was released on 2013-03-09 with total page 354 pages. Available in PDF, EPUB and Kindle. Book excerpt: Market Evolution: Competition and Cooperation is a selection of papers presented at the recent meeting of the European Association of Research in Industrial Economics (EARIE). The volume brings together twenty high-quality papers reflecting frontier research in modern industrial organization. The contributions cover a broad spectrum of increasing theoretical, empirical and policy issues, including analyses of the nature of the firm, product differentiation, research and development, strategic alliances, information sharing in the banking sector, exchange rate pass-through in international competition, labor unionization and product rivalry, buyer-supplier bargaining, multimarket competition and related entry, entry and exit processes, multinational enterprises in the Third World, European integration and the restructuring of Eastern Europe. From a theoretical perspective, many chapters apply game theory to the analysis of firm behaviors and market competition. Moreover, a large number of the studies contain a significant empirical part, mainly by employing econometric techniques, to test the hypotheses derived from modern industrial organization theories. Data from Belgium, Germany, the Netherlands, Portugal, the United Kingdom and the European Union are presented and analyzed.
Download or read book How Do Regulations of Entry and Credit Access Relate to Industry Competition International Evidence written by Ms.Deniz O Igan and published by International Monetary Fund. This book was released on 2018-04-11 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the extent to which regulations of entry and credit access are related to competition using data on 28 manufacturing sectors across 64 countries. A robust finding is that bureaucratic and costly entry regulations tend to hamper competition, as proxied by the price-cost margin, in the industries with a naturally high entry rate. Rigid entry regulations are also associated with a larger average firm size. Conversely, credit information registries are associated with lower price-cost margin and smaller average firm size in industries that rely heavily on external finance—consistent with access to finance exerting a positive effect on competition. These results suggest that incumbent firms are likely to enjoy the rent and market share arising from strict entry regulations, whereas regulations enhancing access to credit limit such benefits.
Download or read book Essays on Corporate Finance and Product Market Competition written by Bomi Lee and published by . This book was released on 2014 with total page 176 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation contains two essays on the aggressive behavior of corporations in product market competition. In the first essay, I investigate how market structure can impact a firm's risk of facing predation by rivals, and hence, its financial policy decisions. Using a simple model, I demonstrate that a firm faces a greater predation threat when it meets the same competitor in many markets, as this competitor is able to internalize more of the benefit, degrading the firm's ability to compete in the future through aggressive actions today. I then test the predictions of the model using 2003-2011 panel data on store location across retail store chains in the US. I find that firms tend to expand more aggressively in markets shared with a competitor experiencing a substantial increase in leverage, or a decline in a credit rating, when they face that competitor in more of the other markets. The expansion relationship was found to be stronger in data from the 2008-2009 financial crisis, a period when difficulty in rolling over or obtaining new debt made it especially hard for weak firms to absorb losses. I also show that a firm facing the same competitors in many markets choose lower levels of leverage and that it decreases that leverage when a merger in the industry increases the amount of competitive overlap it has with other firms. These results suggest that firms are aware of the predation risk due to a competitive overlap and select financial policies to minimize this risk. In the second essay, I study the impact of internally generated funds on product market competition. More specifically, I investigate the idea that firms compete aggressively when their competitors face cash flow shortfalls. Testing this idea is challenging because competitor's cash flow changes are potentially endogenous with respect to firm's behavior. I address this problem in three ways. First, I investigate firm's reaction in a given market when its competitors face cash flow shortfalls outside of that market; this analysis is conducted using store location data on retail store chains. Second, I focus on the 2008-2009 financial crisis period in which retail store chains were hit by a negative demand shock which was hardly expected ex ante. Finally, I use a shock to local economic conditions which varies across markets and the different distributions of store locations across firms as instruments for the changes in competitors' cash flows. I find that a firm expands more in a given market in which it competes with rivals which face a more negative cash flow shortfall in the other markets. This relation is stronger when the competitors were highly leveraged before the crisis. Finally, I illustrate evidence that a firm responds more aggressively to competitor's cash flow shortfalls if it competes with that competitor in many of the same markets; this result is consistent with the prediction of the model in Chapter 1. These essays contribute to the literature by adding new evidence on the predatory behavior of corporations in product market competition.
Download or read book Product Market Structure and Monetary Policy written by and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Monetary policy aims at affecting corporate borrowing by influencing the marginal costs of firms, but its potency can be conditioned by the degree of market competition. We first identify conditions under which changes in marginal costs may have different effects on credit constraints and output under different competitive environment, in a simple Cournot competition setting. We then exploit changes in monetary policy to examine whether the pass-through of borrowing costs is affected by market structure. First,we use as an experiment the announcement of the ECB Outright Monetary Transactions (OMT) program in a triple-differences specification. We show that small firms (which have low market power and higher credit constraints) in "stressed" countries (which benefited more from the policy) within less concentrated sectors experienced a larger reduction in credit constraints than similar firms in more concentrated sectors. Second, we exploit continuous state-of-the-art measures of monetary policy shocks to study how market structure affects pass-through to real variables, like investment and sales growth. We find evidence that firms with more market power respond less to monetary policy shocks. These results show that the interaction of borrowing capacity and market structure matters, and that concentration may have important effects on monetary policy transmission.
Download or read book Does Product Market Competition Increase Credit Availability written by Vittoria Cerasi and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: When there is asymmetric information between investors and firms, credit availability is affected by the value of collateralized productive assets. If liquidation occurs, investors recover a greater value the higher the probability to find a buyer and the higher his willingness to pay to use the assets for production. We extend the idea of complementarities among firms in the same industry (as in Shleifer and Vishny, 1992) to study under which conditions credit availability is enhanced by competition in the product market.
Download or read book Product Market Competition and Agency Costs written by Jennifer Jane Baggs and published by . This book was released on 2006 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Economists have long held the belief that competition improves efficiency. One of the mechanisms suggested is that product market competition alleviates agency costs, which in turn many enable firms to induce higher effort and greater efficiency from their managers. In this way, competition mitigates what Leibenstein (1966) called 'X-inefficiencies.' Despite growing interest, an unambiguous theoretical formulation for this 'vague suspicion' has proved difficult to obtain. In this paper we examine the impact of competition on efficiency both theoretically and empirically. The main theoretical contribution of this paper is to show that product market competition can have a direct, and ambiguously positive effect on managerial incentives."--Unedited text from document.
Download or read book Product Market Competition Ownership Structure and Capital Structure written by Ernesto Santiago Schargrodsky and published by . This book was released on 1997 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Product Market Competition and Corporate Cash Holdings written by Sanjiv Sabherwal and published by . This book was released on 2019 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: From a mixed sample of developed and emerging economies, this study documents a positive relationship between product market competition and corporate cash holdings, using a new composite measure of competition that complements existing proxies in two ways: it is likely the first to captures all three horizontal dimensions of product pricing power, and, the accounting data-based construction facilitates the computation of competition for non-U.S. firms.The positive association between competition and liquidity is influenced by various firm- and country-level factors. Specifically, competition-driven cash stockpile is lower when the firms are more dependent on external financing, more financially constrained, or located in countries with stronger investor protection. Across countries, this cash hoarding behavior is strengthened in developed equity markets but weakened in developed credit markets. Overall, the role of product market competition as a global driver of corporate cash holdings is statistically positive and economically significant after many robustness checks.
Download or read book The Market Concentration Doctrine written by Harold Demsetz and published by Washington : American Enterprise Institute for Public Policy Research. This book was released on 1973 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effect of Credit Market Competition on Firm creditor Relationships written by Mitchell A. Petersen and published by . This book was released on 1993 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Credit Market Competition and Intertemporal Smoothing written by Richard Fairchild and published by . This book was released on 2000 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt:
