Does Market Competition Influence Over-investment? Empirical Evidence from Strategic Emerging Industries

Abstract

Abstract:

Based on the characteristics and development trend of strategic emerging industries (SEI), this paper studies the comprehensive impact of external market competition and market position on overinvestment. The research finds that, based on the fixed effect of industrial policy, market competition drives the overinvestment of enterprises through the "preemption" effect and the "comparison" effect. Further, the difference of market position will bring "natural protection effect" and "information barrier effect", which correct the influence of market competition on over investment, and the higher market position of enterprises will exacerbate the driving effect of market competition on overinvestment. This research confirms that the overinvestment of SEI is a defensive response to competition in the good policy expectations.

Key words: market competition, over-investment, market position, strategic emerging industries

Liu Tingli, Cai Jiaojiao, Yang Songling. Does Market Competition Influence Over-investment? Empirical Evidence from Strategic Emerging Industries[J]. , 2019, 31(12): 219-232.

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