Abstract

http://ssrn.com/abstract=1787315
 
 

References (44)



 
 

Citations (9)



 


 



Product Market Threats, Payouts, and Financial Flexibility


Gerard Hoberg


University of Maryland - Department of Finance

Gordon M. Phillips


University of Southern California; National Bureau of Economic Research (NBER)

Nagpurnanand R. Prabhala


University of Maryland - Robert H. Smith School of Business

August 30, 2012

Journal of Finance, Forthcoming

Abstract:     
We examine how product market threats influence firm payout policy and cash holdings. We develop new measures of competitive threats using firms’ product text descriptions. Our primary measure, product market fluidity, captures changes in rival firms’ products relative to the firm’s products. We show that fluidity decreases firm propensity to make payouts via dividends or repurchases and also increases the cash held by firms, especially for firms with less access to financial markets. These results are consistent with the hypothesis that firms’ financial policies are significantly shaped by product market threats and dynamics.

Number of Pages in PDF File: 55

Keywords: Dividends, Repurchases, Payout, Cash, Product Markets, Dynamic Product Markets, Competition

JEL Classification: G35, G30, G31, L10, L21

Accepted Paper Series


Download This Paper

Date posted: March 17, 2011 ; Last revised: September 7, 2012

Suggested Citation

Hoberg, Gerard and Phillips, Gordon M. and Prabhala, Nagpurnanand R., Product Market Threats, Payouts, and Financial Flexibility (August 30, 2012). Journal of Finance, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1787315 or http://dx.doi.org/10.2139/ssrn.1787315

Contact Information

Gerard Hoberg (Contact Author)
University of Maryland - Department of Finance ( email )
Robert H. Smith School of Business
Van Munching Hall
College Park, MD 20742
United States
HOME PAGE: http://www.rhsmith.umd.edu/finance/faculty/hoberg.aspx
Gordon M. Phillips
University of Southern California ( email )
Marshall School of Business
Los Angeles, CA 90089
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Nagpurnanand R. Prabhala
University of Maryland - Robert H. Smith School of Business ( email )
4427 Van Munching Hall
College Park, MD 20742-1815
United States
301-405-2165 (Phone)
301-405-0359 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 2,194
Downloads: 699
Download Rank: 18,904
References:  44
Citations:  9

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.328 seconds