We examine whether corporate rivals react to industry-specific competition-shocks by increasing product differentiation or, alternatively, by lowering differentiation to capture scale-economies. As rival reactions affect intraindustry cash-flow correlations, these two hypotheses imply...

The joint plan by the U.S. Treasury and the Federal Deposit Insurance Corporation, announced on Monday, October 13, 2008, represented the largest financial transfer from taxpayers to financial institutions in U.S. history. Existing academic studies have analyzed whether this massive state...

The joint plan by the U.S. Treasury and the Federal Deposit Insurance Corporation, announced on Monday, October 13, 2008, represented the largest financial transfer from taxpayers to financial institutions in U.S. history. Existing academic studies have analyzed whether this massive state...

How does competition affect innovation in the banking industry? We use the 1994 Riegle-Neal Interstate Banking and Branching Efficiency Act as a major exogenous shock on U.S. banking industry competition and study its impact on innovation. Addressing this issue is challenging however because...

Mergers and acquisitions (M&As) are major events, potentially reshaping competition among industry rivals. Despite their seeming importance, the existing literature reports only a limited impact of M&As on the competitive environment. Our paper revisits this issue using a novel approach that...

Roll R² (1988) concludes that our ability to explain stock returns is modest: close to 80% of the daily stock returns variance (65% for monthly stock returns) remain unexplained by a combination of priced factors and a portfolio of industry peers, even controlling for firm specific news...