Adam Smith Business School

Professor Boris Nikolov, University of Lausanne

"Beyond Peers: Cross-Industry Competition and Strategic Financing"
Wednesday 21 February. 15:00
Room 282 (Hot House) ASBS PGT Building

Abstract

Using data on firms’ self-declared competition networks, we identify over ten competition communities in the U.S. economy, defined as groups of firms within and across industries that are direct or indirect competitors. Based on this observation, we build a model in which firms strategically respond to their direct and indirect competitors in both product market and financing. Due to predatory strategic interactions, shocks to a firm can impact any other firm’s financing decision in the same competition community. The model predicts complementarity in financing when the competition community’s network structure is of heavy-tailed degree distribution, which we validate empirically.

Bio

Boris Nikolov is Professor of Finance and Vice-Dean of Research at the University of Lausanne and Professor at the Swiss Finance Institute. He was previously a faculty member at the University of Rochester.

Professor Nikolov's main areas of research are corporate finance and corporate governance. In particular, he works in the field of ESG finance and recently has focused on how artificial intelligence can help address corporate finance questions. His work has been published in various leading journals, in particular the Journal of Finance.

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First published: 19 January 2024