Being so close to Cambridge,
Enables IFA’s appreciate the excellence in all disciplines that emanates from our academic institutions. Like Cambridge Endowment for Research in Finance(CERF), founded in 2006 by Cambridge Finance that aims to secure a research community of the highest international standard and reputation by bringing together the various research centres in finance with in the University of Cambridge Drawing leading experts in finance and international law together and covering topics across the financial landscape from regulation and the macroeconomics of markets, asset allocation and risk management, derivative pricing, econometrics, microstructure modelling, liquidity and interaction effects, to finance law. They hold international conferences, regular seminars and weekly workshops, all designed to facilitate the sharing of knowledge and promote cross-discipline working. In addition, they have offered an annual award for the best student paper in finance each year since 2007.
Last week the Cambridge Finance Seminar welcomed Dr Maria Bustamante LSE.
Product Market Competition and Industry Returns ABSTRACT. This paper documents that product market competition has two opposing effects on asset returns. We find that firms in more competitive industries have less valuable growth options and thus lower loadings on systematic risk. We also find that these firms have lower profit margins which make them more exposed to systematic shocks. The first effect dominates the second, so that firms in more competitive industries earn lower asset returns on average. Our empirical findings are robust to using five alternative empirical measures of competition, and to controlling for the sample selection bias of publicly listed firms.
The full paper can be downloaded
here
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