Corporate Investment and Innovation in the Presence of Competitor Constraints

• 成果类型: Article
• 署名作者: Grieser, William; Liu, Zack
• 署名单位: Texas Christian University; University of Houston System; University of Houston
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz021
• 发表日期: 2019
• 页码: 4271
• 关键词: Financial constraints; bankruptcy; debt; contagion; matter

摘要

We study the relation between investment behavior and competitor financial constraints. Using interfirm patent citations and text-based product market similarities to identify intransitive competitor networks, we find that firms increase investment spending, patenting activity, and opportunistic hiring when competitor constraints become more binding. In addition, firms shift their investment composition (product market and patent portfolios) to compete more aggressively with relatively constrained competitors. To mitigate endogeneity concerns, we exploit the 2004 AJCA tax holiday and the 1989 junk bond crisis as exogenous shocks to competitor constraints, and we find similar effects.