Product Market Competition Research Articles

Does digital transformation matter for international diversification? The role of product market competition

Purpose This study aims to investigate the impact of product market competition on the relationship between firm digital transformation and international diversification. It aims to uncover how competition moderates this relationship and to reveal the nonlinear dynamics between digital transformation and international diversification in strategic decision-making processes. Design/methodology/approach Using a panel logistic regression analysis, this study examines data from 235 Malaysian nonfinancial listed companies from 2012 to 2019. The analysis focuses on the manufacturing and technology industries due to the availability of digital transformation data, leading to a data set of 1,180 year-firm observations. Findings The results reveal a nonlinear relationship between digital transformation and international diversification, intensified by product market competition. Initially, digital transformation positively affects international diversification, but this effect turns negative as competition increases. Robustness checks validate these findings, indicating that competition’s impact varies with the level of digital transformation. Research limitations/implications This study’s findings are based on text analysis as a proxy for digital transformation, which may not fully capture organizational changes. Future research could use reported transformation costs or mandatory disclosures. In addition, this study focuses solely on international diversification, excluding other forms of diversification and financial constraints. Practical implications Policymakers should recognize that high product market competition can negate the benefits of digital transformation on internationalization. They need to balance promoting digital transformation with addressing competitive challenges. Managers should analyze the competitive landscape before pursuing international expansion, as high competition can diminish the advantages of digital transformation. Originality/value This research enriches agency and resource-based view theories by revealing the complex dynamics between digital transformation, competition and international diversification. It introduces a parabolic relationship between competition and diversification, challenging traditional assumptions and providing a comprehensive framework for understanding strategic decisions in competitive environments.

Assessment Of Risk Factors in The Production, Processing, Storage and Transportation of Pre-Prepared Meals

Microbial contamination and chemical contamination are the main factors that cause food safety and quality problems in pre-prepared meals. According to the order of raw material production, processing, storage and transportation in the pre-prepared meal supply chain, this article analyzes the potential microbial risk points from the perspective of contamination pathways, lists common food contamination microorganisms and their hazards, and divides common chemical contamination according to production links, aiming to warn the executors of the corresponding processes to prevent and control potential microbial contamination and chemical hazards, so as to control the food safety risks of the pre-prepared meal industry at a macro level. Through analysis, this article found that if these measures are effectively implemented, the food safety contamination of prepared vegetable products will be significantly reduced, and product quality and market competitiveness will also be improved. Future research can focus more on building a comprehensive food safety prevention and control system in the prepared food industry to achieve healthy and sustainable development.

The Effect of Business Capital on Business Performance with Product Innovation as a Mediating Variable in Kendari City Micro Businesses

Kendari City''s micro-enterprises struggle with limited capital and low product innovation, with 60% facing difficulties accessing capital. This study aims to examine the relationship between business capital and micro-enterprises'' performance, with product innovation strengthening this relationship. Policy support is crucial for improving competitiveness and sustainability. This study investigates the effect of business capital on business performance in micro enterprises in Kendari City, focusing on product innovation as a moderating variable. Data was collected from 50 respondents using the Slovin formula and Structural Equation Modeling (SEM) method. The study validated and tested the data for reliability and validity, providing an overview of the relationship between business capital and performance. Business capital significantly influences business performance, product innovation, and overall performance. Its Path Coefficient is 0.011, with a T-Statistic value of 9.875, above the threshold of Z α 0.05. Product innovation also positively influences business performance, with a Path Coefficient of 0.004 and a T-Statistic value of 2.855. Business capital''s influence on product innovation is fairly large, exceeding the threshold. Business capital significantly impacts the performance of Micro, Small, and Medium Enterprises (MSMEs) in Kendari City, enhancing product innovation, competitiveness, and market competitiveness. A synergistic strategy utilizing sufficient capital fosters innovative capabilities, resulting in improved performance.

Expression of Concern: The role of product market competition and analyst attention in modulating the link between equity pledges and classification shifting

Expression of Concern: The role of product market competition and analyst attention in modulating the link between equity pledges and classification shifting

Biased manager aggressiveness, understated profits, tax pass‐through, and tax incidence in a differentiated duopoly

AbstractIn this paper, we examine the findings on tax pass‐through and tax incidence in a differentiated duopoly when the owner of each firm hires a biased manager. We first show that irrespective of the mode of product market competition, the tax pass‐through and tax incidence are higher when owners hire biased managers compared to the case of no delegation. We then consider the issue of tax pass‐through and tax incidence when the owners understate the profit to lower the tax liability. Surprisingly, we find that when firms understate their profit, hiring biased managers further amplifies the tax pass‐through and tax incidence under an ad valorem tax. However, the results remain the same under specific taxes.

Calligraphy Art in Contemporary Packaging Design

Traditional culture plays a vital role in packaging design. This article explores how to incorporate the elements of small seal characters into the packaging design of stationery products to show its unique cultural heritage and artistic charm. Based on the importance of traditional culture and the cultural value of stationery brands, this article analyzes the artistic interpretation of small seal characters and their historical application in packaging design to explore the cultural connotations of existing stationery packaging design. By analyzing the problems existing in the packaging design of stationery products and finding solutions to the problems, this article explores how to combine the small seal characters with modernization in the packaging of stationery products through innovative design techniques, and finally completes the practice of stationery packaging design that meets the aesthetic needs of young people. It is hoped that this example will be used to try to achieve the purpose of enhancing the market competitiveness, economic value and aesthetic value of stationery products.

Breaking Through? The Divergent Consequences of CEO Political Ideology on Firm Inventiveness

We draw on upper-echelons literature recognizing the important role of CEOs in firm strategy, including innovation, and research on CEO political ideology and executive discretion to explore the relationship between CEO political ideology and firm breakthrough inventions. We suggest that CEO liberalism is a double-edged sword and is positively associated with firm breakthrough inventions but also less-useful inventions. We suggest that these relationships are shaped by three different sources of executive discretion: CEO-TMT pay gap, institutional investors, and existing product-market competition. We find support for our hypotheses on a sample of 581 public firms using firms’ patenting and citation activities to capture inventions. We infuse a values, contingency-based perspective to work on CEO characteristics and firm breakthrough inventions, provide a more comprehensive understanding of the multifaceted nature of managerial discretion in setting or deviating firms on/from certain technological trajectories, and extend work on political ideology by showing the relevance of political ideology for explaining not just variations in firm internal resource allocation decisions, corporate activism, and entrepreneurship but also in the level and nature of inventions it produces.

Does low-carbon pilot policy promote corporate green total factor productivity?

This study investigates the impact of China’s low-carbon pilot policy on corporate green total factor productivity. Exploiting the staggered rollout of the policy across cities, we employ a difference-in-differences approach and find that the policy significantly increases the green total factor productivity of heavily polluting firms. This effect is driven by improvements in both green technological progress and efficiency. The positive impact is more pronounced for firms facing financial constraints, lower product market competition, and lower capital intensity. Textual analysis of annual reports reveals that the policy promotes corporate green total factor productivity by enhancing executives’ environmental awareness and facilitating firms’ green transformation. Our findings highlight the effectiveness of the low-carbon pilot policy in advancing China’s green development agenda and provide policy implications for other economies pursuing sustainable growth.

CEO trustworthiness and investment efficiency: evidence from China

Purpose This study aims to investigate the influence of chief executive officer (CEO) trustworthiness on firm investment efficiency and explores how this relationship varies in different contexts, including product market competition (PMC), institutional investors, media coverage, analyst monitoring and ownership structure. Design/methodology/approach The authors examined a sample of A-Share non-financial firms listed on the Shanghai and Shenzhen Stock Exchanges from 2005–2018 by using panel date regression techniques. The robustness of the findings is affirmed through alternative measures of investment efficiency and various econometric techniques. Further, various endogeneity tests are conducted to confirm that the findings are not affected by potential bias. Findings The authors find a significant positive effect of CEO trustworthiness on firms’ investment efficiency and exhibit that CEO trustworthiness mitigates the issue of underinvestment rather than overinvestment. Further, PMC strengthens the association between CEO trustworthiness and investment efficiency. The influence is more pronounced when institutional investors, media and analyst monitoring are low and in non state-owned firms. Likewise, financial reporting quality is found to be an underlying mechanism for the positive association between CEO trustworthiness and investment efficiency. Research limitations/implications The reliance on a location-specific index of CEO trustworthiness may obscure its true nature, and caution is warranted when generalizing these results to other regions. Practical implications This study suggests that elevating a trustworthy CEO to the firm upper echelon can improve investment efficiency. Policymakers and investors should recognize and leverage the effect of CEO trustworthiness in firms, especially those with weaker governance structures. Originality/value This study enriches the literature about investment efficiency by introducing a novel determinant, CEO trustworthiness and establishes that it acts as an informal social institution that improves firms’ resource utilization in emerging economies with weak governing structures.

Climate policy and corporate green transformation: Empirical evidence from carbon emission trading

The implementation of climate policies in the financial sector is a global consensus among countries committed to sustainable development. Therefore, the impact of carbon trading policy (CTP) on firms’ green transformation (GT) is examined by manually compiling a directory of emission control enterprises in China’s carbon market from 2008 to 2022, using a difference-in-differences model. This topic must be urgently explored through theoretical and empirical studies. This study found that CTP can promote corporate green transformation; however has no industry and regional spillover effects. Mechanism analyses indicate that CTP can promote a firm’s green transformation by enhancing green innovation and environmental, social, and governance (ESG) performance. Heterogeneity analysis reveals that the effect of CTP on GT is effective when firms have higher “greenwash” scores, lower financialization, weaker product market competition, and higher levels of environmental regulation. This study reveals the microeconomic effects of CTP, and the findings provide empirical evidence that China can realize Porter’s hypothesis.

Influence of specific tobacco endophytic Bacillus on tobacco leaf quality enhancement during fermentation.

This study aimed to investigate the potential role of endophytic bacteria in tobacco leaves during the fermentation process to enhance the quality of tobacco. We isolated 11 endophytic bacteria from fresh tobacco leaves and selected Bacillus halotolerans NS36 and Bacillus mycoides NS75 based on sensory evaluation, both of which significantly improved the sensory quality of tobacco leaves. Specifically, NS36 decreased offensive taste in tobacco leaves, while NS75 improved the quality by increasing the aroma. Chemical analysis revealed that fermentation with B. halotolerans NS36 significantly decreased the content of irritant compounds such as lignin, cellulose, starch, and pectin. In contrast, fermentation with B. mycoides NS75 reduced the content of cellulose, starch, and protein, while significantly increasing the content of Amadori compounds and glycosides. Through whole-genome sequencing, we predicted enzyme systems related to these chemical changes. B. halotolerans NS36 mainly secreted enzyme systems associated with the degradation of lignin, cellulose, starch, and pectin, thereby reducing irritants in tobacco leaves, diminishing unpleasant tastes, and achieving a more balanced sensory quality. B. mycoides NS75, on the other hand, secreted enzyme systems related to protein and glycoside hydrolysis, increasing Maillard reaction products and glycosylated compounds in tobacco leaves, thus enhancing the aroma quality and quantity. The findings of this study offer a new perspective for the tobacco industry, namely, the use of endophytic bacilli to improve the off-flavors and aroma of tobacco leaves, which could not only enhance the industrial applicability of tobacco leaves but also potentially strengthen the market competitiveness of products. These discoveries lay the foundation for further research and application, especially in the development of new biotechnologies to improve the quality of tobacco products.

Banking competition and corporate risk: Micro evidence from China

AbstractAlthough an extensive body of research examines the impact of banking competition on the overall economy, less is known about how banking competition affects corporate risk. Using a sample of more than 12,909 firm‐year observations covering the period from 2001 to 2019, we find that increased banking competition significantly elevates corporate risk. The mechanism analysis indicates that bank competition promotes increased corporate risk‐taking by easing financing constraints. The observed effects are particularly strong among firms in their startup and growth stages, those operating in high‐interest rate environments, regions with lower levels of financial competition and industries characterised by intense product market competition. This paper sheds light on the understanding of the relationship between corporate risk and banking competition in one of the most important emerging economies. The take‐away lesson for policy‐makers here is to provide guidance for carefully considering the trade‐offs between increased banking competition and potential risks to financial stability. Also, banks need to strike a balance between fostering healthy competition and maintaining prudent risk management practices.

The Correlation of CEO Power, Gender and Product Market Competition on Firm Value in the Property and Real Estate Sector

This study aims to analyse the relationship between Chief Executive Officer (CEO) Power, gender, Product Market Competition on firm value. The research design was quantitative method with an associative approach. The population were property and real estate sector companies listed on the Indonesia Stock Exchange from 2019 to 2022, total of 144 sample data from 36 companies. The dependent variable is firm value, the independent variables are CEO power, gender and product market competition. Chief Executive Officer (CEO) power is measured by the parameters of age, education level and share ownership. Firm value is measured using Tobins'Q. Analysis of the level of competition used the industry-adjusted price-cost margin (IPCM) approach. The analysis technique used is Spearman correlation. The results showed that there was no significant relationship between CEO power: age and share ownership, as well as CEO gender on firm value, while there was a significant relationship between CEO power: education level and product market competition on firm value.

Short selling and product market competition

We empirically investigate how short selling affects firms’ product market performance via a managerial monitoring channel. Using both historical data and exogenous shocks to short selling, we find robust evidence that short interest negatively impacts market shares, especially in large firms. Our Reg SHO results are stronger in concentrated industries and industries where firms compete in strategic substitutes. Further tests show that these effects are driven by low ex-ante stock price informativeness. The evidence suggests that the interaction between market power and price opacity generates incentives for overproduction, which short selling attenuates. Our results support policies that facilitate price discovery in the presence of market power.

The effects of entry in bilateral oligopoly

We show that a firm’s profits under Cournot oligopoly can be increasing in the number of firms in the industry if wages are determined by (decentralised) bargaining in unionised bilateral oligopoly. The intuition for the result is that increased product market competition following an increase in the number of firms is mirrored by increased labour market rivalry which induces (profit-enhancing) wage moderation, a result which does not occur if unions can coordinate their wage demands under centralised bargaining. Whether the product or labour market effect dominates depends on the nature of union preferences, with a higher preference for wages making profit-raising entry more likely. We analyse how our results are sensitive to the curvature of the demand function, and the extent to which structural advantages due to incumbency enhance the benefits of entry. We also consider: (i) the impact of entry on a measure of social welfare comprising union utility, consumer surplus and firms’ profits, and (ii) a setting in which unionisation is determined endogenously through the decision of firms on whether or not to recognise unions.

Teff: Its applicability in various food uses and potential as a key component in gluten-free food formulations—An overview of existing literature research

In recent years, there has been a significant increase in demand for gluten-free foods. This rise can be attributed to a growing number of individuals opting for gluten-free diets due to factors such as gluten sensitivity and celiac disease. Interest in teff has also increased markedly due to its high protein content, balanced amino acid composition, and rich nutrient contents including fiber, iron, and calcium, along with its gluten-free nature. Additionally, teff exhibits positive functional properties that contribute to improving texture, moisture retention, and shelf life in gluten-free products. Its mild flavor profile allows for versatile applications across a spectrum of culinary applications, enhancing the sensory appeal and taste of gluten-free offerings. This makes it a suitable alternative to wheat and other grains in food applications for individuals with celiac disease. Overall, integrating teff into gluten-free formulations presents an attractive opportunity to enhance the nutritional quality, sensory experience, and market competitiveness of gluten-free products, catering to the diverse needs and preferences of consumers seeking gluten-free alternatives for health, dietary, or lifestyle reasons. Further research and innovation in teff-based product development are crucial to fully unlock its potential and promote inclusive, sustainable growth in the gluten-free food sector. Therefore, these attributes underscore teff's promising role in the global food and beverage industries.

Microorganisms in Fermented Foods and Their Effects on the Human Body

In recent years, microorganisms in fermented foods have shown an important role in regulating human health. Studies have shown that probiotics have significant health benefits in fermented foods, such as improving gut health, stimulating immune function, and promoting metabolism, and mental health. Specifically, lactic acid bacteria in yogurt can increase the number of beneficial bacteria in the intestines and reduce the growth of pathogenic bacteria, and yeasts such as Saccharomyces cerevae have multiple health effects on intestinal microbiota protection and anti-inflammation. In addition, various enzymes and metabolites produced by Aspergillus during fermentation process can improve the nutritional value of food. However, although lots of research has been done, the understanding of the microbial mechanism under different fermentation conditions is still insufficient. In this article, the types and influencing factors of microorganisms in yogurt, wine and seasoner were reviewed. The effects of temperature, pH value, fermentation time and other conditions on microbial activity and product quality were analyzed. The results showed that suitable fermentation conditions could significantly increase microbial activity, improve product flavor and health function, and provide a theoretical basis for optimizing the production process of fermented food. The article provides a theoretical basis for improving the fermented food production process, thus helping to improve product quality and market competitiveness. However, this article has some limitations like the lack of understanding of interactions between different microorganisms. Future research should focus on examining the collaborative relationship between these microbes to improve the health benefits and production efficiency of fermented foods.

Anti-collusion leniency legislations and IPO activity: Worldwide evidence

We study the impact of the staggered adoption of anti-collusion leniency legislations around the world on IPO activity. We document that the passage of leniency legislations prompts IPO activity. The effect is amplified in more concentrated industries, while it is mitigated in countries with more stringent competition laws in place and countries in which investors have a lower ability to diversify risk in the financial market. Collectively, these findings are consistent with the view that, by enhancing product market competition, leniency legislations increase the benefits for firms from going public, resulting in higher IPO activity. The results of supplemental analyses suggest that the passage of leniency legislations leads to less underpriced IPOs and a more efficient use of IPO proceeds, and prompts firms with less proprietary information to go public.

Agency conflicts, product market competition and investment efficiency: new evidence from emerging market

PurposeThis study examines the influence of product market competition on investment inefficiency of Indian firms in context of agency problems. Additionally, this study also investigates whether intense competition is a substitute for or complementary to corporate governance in reducing investment inefficiency of firms.Design/methodology/approachUtilizing the residuals extracted from Biddle et al. (2009) investment model, investment inefficiency, overinvestment and underinvestment are measured for 506 non-financial Indian listed firms with 6,998 firm-year observations from 2009 to 2022. Product market competition is measured using various proxies such as the Herfindahl–Hirschman index, top-four firm concentration ratio, total number of firms in industry, industry market size, weighted average of entry costs and research and development (R&D) to sales ratio. Firms' internal governance is measured using a newly corporate governance index developed with 65 new governance stipulations. Several pooled ordinary least squares (OLS) panel regressions were estimated involving investment inefficiency of firms, product market competition, governance index and firm-specific variables. Endogeneity issues were addressed through two-stage least squares. Robustness checks were also conducted using a two-step system generalized method of moments (GMM).FindingsThe main finding of the study indicates that heightened product market competition reduces investment inefficiency, overinvestment and underinvestment among the selected Indian firms suggesting that firms facing intense competition are less prone to invest below or above optimal levels. This is primarily because in highly competitive industries, managers face greater liquidation risks, prompting more efficient capital investment decisions. The results also indicate that robust corporate governance significantly mitigates investment inefficiencies in non-competitive industries compared to competitive ones suggesting heightened competition reduces managerial slack, resulting in diminished benefits from good governance in competitive settings. Overall results indicate a substitution effect between corporate governance and competition in reducing investment inefficiency, with robustness across various empirical specifications, industry classifications and alternative competition and inefficiency measures.Practical implicationsThe evidence from this work emphasizes the pivotal roles of market competitiveness and corporate governance in shaping investment efficiency. Regulators must closely monitor monopolistic behaviors to safeguard stakeholder interests, enhance investment efficiency and foster value creation. Recognizing the positive impact of market competition, firms should prioritize initiatives to promote industrial openness and intensify competition while strengthening market mechanisms. Policymakers should consider implementing competition-centric governance policies, such as deregulation and antitrust laws, to stimulate market competition. These measures can mitigate governance-related costs and promote a competitive marketplace.Originality/valueThis study provides fresh evidence concerning the effects of product market competition on investment efficiency of Indian firms under new governance norms, an unexplored area in India as most of the existing work has primarily examined the association between competition and investment levels. To best of our knowledge, this is one of the earliest studies demonstrating the substitution effects of competitiveness and governance systems on lowering investment inefficiency suggesting a significant influence of corporate governance in non-competitive industries. Finally, this study contributes to the field of methodology by developing a new firm-specific governance index based on 65 governance indicators.

The role of accounting conservatism in corporate innovation

AbstractWe provide evidence to determine whether conservative financial reporting is associated with firm‐level investments in innovation in China. We find that firms adopting a more conservative reporting policy invest substantially more in innovative projects. We also find that conservative reporting practices improve the association between executives' pay‐for‐performance and a firm's innovation efforts. The association between conservatism and firm‐level innovation is concentrated in firms that are in the non‐high‐tech industries, that have higher financial leverage and more product market competition. Our paper adds to public policy by providing evidence of the beneficial influence of accounting conservatism on higher innovation investment.