Our research aims to deepen the understanding of (i) how financial markets value product innovation across various firm types, industries, and economic conditions, and (ii) how market sentiment influences the private economic value of product innovation, its impact on firms’ and competitors’ profitability, and the resulting resource reallocation—such as capital, labor, and R&D—both within and across firms.…Read More
This research project aims to understand how innovation propagates through the reallocation of talents, and how this innovation diffusion process is shaped by the competition structure of talent labor markets. Specifically, we exploit various heterogenous shocks to firms, including credit supply shocks, financial constraints shocks, innovation shocks, to examine how firms react in their hiring and firing decisions under different competition structures of talent labor markets.…Read More
We develop a general-equilibrium asset-pricing model with dynamic games of price competition. Price war risks arise endogenously from declines in long-run growth as firms’ incentive to undercut prices grows stronger with a worse growth outlook. …Read More
Firms tend to compete on prices more aggressively when they are in financial distress; the intensified competition in turn reduces firms’ profit margins, pushing them further into distress. Competitors’ aggressive pricing reactions could be attributed to both predatory and self-defensive incentives.…Read More
