Foreign competition and the durability of US firm investments

• 成果类型: Article
• 署名作者: Fromenteau, Philippe; Schymik, Jan; Tscheke, Jan
• 署名单位: University of Munich; University of Mannheim; Organisation for Economic Co-operation & Development (OECD)
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12286
• 发表日期: 2019
• 页码: 532-567
• 关键词: trade liberalization; import competition; credit constraints; market-size; IMPACT; INNOVATION; GLOBALIZATION; adjustment; exports; GROWTH

摘要

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.