We study how foreign competition affects the composition of investments inside firms. A parsimonious model predicts that firms have an incentive to shift their investments towards more short-term assets when exposed to tougher competition. Using data on expenditures of listed US companies into...

According to recent literature, competition is assumed to have a growing positive impact on innovation when the distance to the technological frontier is decreasing (Aghion et al. [2005]). Using industry-level indicators, this paper empirically tests the effect of regulation on ICT capital...