Abstract
This article documents evidence that intra-industry uncertainty has a positive relation with firm valuation. Specifically, the reduction of intra-industry uncertainty about firm future profitability leads to a decline of firm ME/BE ratios over time. The authors find that the positive relation is more prominent for firms in high-tech sectors and those with intensive product market competition. Their results are robust to the control of firm-level uncertainty and alternative measures of intra-industry uncertainty. TOPICS:Fundamental equity analysis, statistical methods
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