Product market strategy and corporate policies

• 成果类型: Article
• 署名作者: Hajda, Jakub; Nikolov, Boris
• 署名单位: Universite de Montreal; HEC Montreal; University of Lausanne; European Corporate Governance Institute
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.09.003
• 发表日期: 2022
• 页码: 932-964
• 关键词: Product market strategy; Product life cycle; INVESTMENT; capital structure; structural estimation

摘要

We examine how product life cycle affects investment and financing by estimating an industry equilibrium model that embeds product portfolio characteristics. In the model, firms trade off higher profitability of newer products versus product introduction costs. Using product-level data, we find that the product dimension is critical in quantitatively explaining cash flow dynamics, corporate policies, and industry structure. We show that product introductions and capital investment are complements and that product dynamics incentivize preserving more debt capacity. Our estimates reveal that product life cycle is more pronounced for firms with smaller and more concentrated product portfolios as well as those with high product variety.