TY - JOUR
T1 - Financial conditions, local competition, and local market leaders
T2 - The case of real estate developers
AU - Fan, Ying
AU - Leung, Charles Ka Yui
AU - Yang, Zan
N1 - Funding Information:
Osaka University, Grant/Award Number: JP 20H05631; Ministry of Science and Technology, Grant/Award Numbers: MOST 110‐2634‐F‐002‐045, MOST 109‐2634‐F‐002‐045; National Taiwan University, Grant/Award Number: 110L900201 Funding information
Funding Information:
The authors are grateful to many friends for discussions over the years, and especially Yen‐Jong Chen, Yuichiro Kawaguchi, Chiu‐Yu Ko, Tommy Leung, Joe Ng, Shane Su, Edward Tang, Byron Tsang, Kerry Vandell, an anonymous referee and David Cook (editor), seminar participants in the ASSA meeting (CEANA), IAAE meeting, GCREC meeting, TEA meeting, Tsinghua University, for helpful comments, and City University of Hong Kong, Tsinghua University for financial support. Leung's travel has received support from the National Taiwan University through Grant no. 110L900201, and Ministry of Technology MOST 109‐2634‐F‐002‐045, MOST 110‐2634‐F‐002‐045, and from ISER in Osaka University through JSPS KAKENHI Grant Number JP 20H05631. Part of this research was conducted when Leung visited the Hoover Institution, whose hospitality is gratefully acknowledged. The usual disclaimer applies. 1
Publisher Copyright:
©2021 John Wiley & Sons Australia, Ltd
PY - 2021
Y1 - 2021
N2 - This paper studies whether (and how) corporate decisions are affected by internal factors (e.g., the financial conditions of own company) and external factors (e.g., the actions of local competitors) in an imperfectly competitive environment. We study the listed real estate developers in Beijing as a case study. Our hand-collected dataset includes transaction-level information booked indicators (e.g., profitability, liability, and liquidity) and unbooked financial indicators (political connections). Our multi-step empirical model shows that both the firm's financial conditions and its competitors' counterparts are essential but play different roles in the output design, pricing, and the time-on-the-market (TOM). Internal versus external factors' relative importance relates nonlinearly to the degrees of market concentration. Market leaders' existence alters the small firms' strategy and leads to higher selling prices and slower selling pace in the local market. Our comprehensive financial indicators (booked and unbooked) better predict corporate behaviors than traditional measures.
AB - This paper studies whether (and how) corporate decisions are affected by internal factors (e.g., the financial conditions of own company) and external factors (e.g., the actions of local competitors) in an imperfectly competitive environment. We study the listed real estate developers in Beijing as a case study. Our hand-collected dataset includes transaction-level information booked indicators (e.g., profitability, liability, and liquidity) and unbooked financial indicators (political connections). Our multi-step empirical model shows that both the firm's financial conditions and its competitors' counterparts are essential but play different roles in the output design, pricing, and the time-on-the-market (TOM). Internal versus external factors' relative importance relates nonlinearly to the degrees of market concentration. Market leaders' existence alters the small firms' strategy and leads to higher selling prices and slower selling pace in the local market. Our comprehensive financial indicators (booked and unbooked) better predict corporate behaviors than traditional measures.
UR - http://www.scopus.com/inward/record.url?scp=85107024153&partnerID=8YFLogxK
U2 - 10.1111/1468-0106.12360
DO - 10.1111/1468-0106.12360
M3 - Journal article
AN - SCOPUS:85107024153
SN - 1361-374X
JO - Pacific Economic Review
JF - Pacific Economic Review
ER -