Competition Links and Stock Returns

• 成果类型: Article
• 署名作者: Eisdorfer, Assaf; Froot, Kenneth; Ozik, Gideon; Sadka, Ronnie
• 署名单位: University of Connecticut; Harvard University; Universite Catholique de Lille; EDHEC Business School; Boston College
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhab133
• 发表日期: 2022
• 页码: 4300
• 关键词: product market competition; Cash flows; INFORMATION; volatility; RISK

摘要

This paper demonstrates that value-relevant information about a firm appearing in regulatory disclosures of other firms is overlooked by investors. Firms highly mentioned in the 10-K competition section of other firms tend to outperform with risk-adjusted returns of up to 9% annually. Outperformance is concentrated in firms whose competition references are made in the context of targeting rather than admiration. Consistent with investor inattention, abnormal returns stem from cross-sector competition mentions as well as firms with low-analyst coverage. Moreover, highly mentioned firms exhibit improved fundamentals in subsequent years, further signifying they are underpriced.