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We develop a tractable RBC model of the stock market with heterogenous firms. Shares value rests on the rent extracted from proprietary technology à la Dixit-Stiglitz. We prove the existence and uniqueness of the fundamental equilibrium. Closed form solutions are provided for the market...
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This paper attempts to assemble evidence for the relationship between the product and the financial market. Drawing back on work in industrial organization, we analyze the relationship between profit persistence and expected stock returns. We show that long-run profit persistence together with...
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We consider a firm's competitiveness based on the manner by which other firms mention it on their 10-K filings. Using all public firm filings simultaneously, we implement a PageRank-type algorithm to produce a dynamic measure of firm competitiveness, denoted C-Rank. A high-minus-low C-Rank...
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We build a competition network that links two industries through their common market leaders. Industries with higher … centrality on the competition network have higher expected stock returns because of higher exposure to the cross …-industry spillover of distress shocks. The competition intensity on the network is endogenously determined by the major players' economic …
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