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Market power and systematic risk.
- Source :
- Financial Management (Wiley-Blackwell); Jun2024, Vol. 53 Issue 2, p233-266, 34p
- Publication Year :
- 2024
-
Abstract
- We examine the impact of product market competition on firms' systematic risk. Using a measure of total product market similarity, we document a strong negative relationship between market power and market betas. The effect more than triples in the most recent period of low competition. Anticompetitive mergers result in a significant reduction in market betas. Firms facing less competition seem to be partially insulated from systematic discount‐rate shocks. Lower equity costs therefore imply that market power is partly self‐perpetuating. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00463892
- Volume :
- 53
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Financial Management (Wiley-Blackwell)
- Publication Type :
- Academic Journal
- Accession number :
- 177083369
- Full Text :
- https://doi.org/10.1111/fima.12438