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Market share, firm innovation, and idiosyncratic volatility

Author

Listed:
  • Frederick Adjei

    (Southeast Missouri State University)

  • Mavis Adjei

    (Southern Illinois University Carbondale)

Abstract

In this study, we reexamine the link between a firm’s market share and its idiosyncratic volatility. Contrary to extant research, we find that market share is not a determinant of idiosyncratic volatility. Innovative firms continuously innovate resulting in an increase in market share. However, high market share firms may not necessarily increase investment in innovative ventures to maintain market share. Hence an increase in market share does not necessarily lead to an increase in a firm’s idiosyncratic risk.

Suggested Citation

  • Frederick Adjei & Mavis Adjei, 2017. "Market share, firm innovation, and idiosyncratic volatility," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(3), pages 569-580, July.
    • Handle: RePEc:spr:jecfin:v:41:y:2017:i:3:d:10.1007_s12197-016-9371-9
    DOI: 10.1007/s12197-016-9371-9
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    More about this item

    Keywords

    Market share; Firm innovation; Idiosyncratic volatility;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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