Product market competition and operating leverage: International evidence

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dc.citation.issue3
dc.citation.volume33
dc.contributor.authorBabar M
dc.contributor.authorHabib A
dc.date.accessioned2024-02-13T20:20:07Z
dc.date.accessioned2024-07-25T06:48:26Z
dc.date.available2022-04-26
dc.date.available2024-02-13T20:20:07Z
dc.date.available2024-07-25T06:48:26Z
dc.date.issued2022-07-11
dc.description.abstractThis study examines the association between product market competition (PMC) and operating leverage for a large sample of international firms from 46 countries spanning the period 1985–2019. Using the Herfindahl-Hirschman (HH) index and the Industry Adjusted Price Cost Margin (IPCM) as two proxies for PMC, we provide evidence that PMC is significantly and positively associated with the operating leverage of firms. Cross-sectional analyses reveal that investment intensity, firm life cycle and the country-level employment protection legislation moderate the relationship between PMC and operating leverage. This study contributes to the scarce literature on the determinants of operating leverage. We expect our findings to be informative for investors in understanding the role market competition plays in shaping cost structures.
dc.description.confidentialfalse
dc.edition.editionJuly 2022
dc.format.pagination189-216
dc.identifier.citationBabar M, Habib A. (2022). Product market competition and operating leverage: International evidence*. Journal of Corporate Accounting and Finance. 33. 3. (pp. 189-216).
dc.identifier.doi10.1002/jcaf.22558
dc.identifier.eissn1097-0053
dc.identifier.elements-typejournal-article
dc.identifier.issn1044-8136
dc.identifier.urihttps://mro.massey.ac.nz/handle/10179/70922
dc.languageEnglish
dc.publisherWiley Periodicals LLC
dc.publisher.urihttps://onlinelibrary.wiley.com/doi/10.1002/jcaf.22558
dc.relation.isPartOfJournal of Corporate Accounting and Finance
dc.rights(c) 2022 The Author/s
dc.rightsCC BY 4.0
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/
dc.subjectemployment protection legislation
dc.subjectfirm-life cycle
dc.subjectinvestment intensity
dc.subjectoperating leverage
dc.subjectproduct market competition
dc.titleProduct market competition and operating leverage: International evidence
dc.typeJournal article
pubs.elements-id453016
pubs.organisational-groupOther
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