Global competition and global markets: some empirical results
The purpose of this paper is to develop and test a model that relates the profit rates of multinational firms to market share, other firm characteristics, and industry effects where the relevant geographic markets are defined at the global level. We test the proposition that market share and industry fixed effects can explain profitability variation for a sample of multinational firms. The most important finding is that market share has a positive and statistically significant effect on profit rates for a sample of Fortune Global 500 firms. Moreover, the Fortune Global 500 firms exhibit strong industry effects. While there are a number of explanations for a positive market share effect and strong industry effects, a common interpretation is the presence of rivalry among these firms.
Volume (Year): 13 (2004)
Issue (Month): 3 (June)
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