Foreign competition and the durability of US firm investments.

How does the exposure to product market competition affect the investment horizon of firms? We study if firms have an incentive to shift investments toward more short‐term assets when exposed to tougher competition. Based on a stylized firm investment model, we derive a within‐firm estimator using v...

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Publicado en:RAND Journal of Economics (Wiley-Blackwell) Vol. 50; no. 3; pp. 532 - 568
Autores principales: Fromenteau, Philippe, Schymik, Jan, Tscheke, Jan
Formato: Artículo
Publicado: Wiley-Blackwell Fall2019
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Foreign competition and the durability of US firm investments.
      aug:
        au:
          Fromenteau, Philippe
          Schymik, Jan
          Tscheke, Jan
        affil:
          Ludwig Maximilian University of Munich
          University of Mannheim
          OECD
      su:
        International competition
        Economic competition
        Industrial productivity
        Investments
        Durability
      sug:
        subj:
          International competition
          Economic competition
          Industrial productivity
          Investments
          Miscellaneous Financial Investment Activities
          Investment Advice
          Durability
      ab: How does the exposure to product market competition affect the investment horizon of firms? We study if firms have an incentive to shift investments toward more short‐term assets when exposed to tougher competition. Based on a stylized firm investment model, we derive a within‐firm estimator using variation across investments with different durabilities. Exploiting the Chinese World Trade Organization (WTO) accession, we estimate the effects of product market competition on the composition of US firm investments. Firms that experienced tougher competition shifted their expenditures toward investments with a shorter durability. This effect is larger for firms with lower total factor productivity.
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      src: R
    language: English
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