PRODUCT MARKET STRUCTURE,CAPITAL INTENSITY,AND SYSTEMATIC RISK: EMPIRICAL RESULTS FROM THE THEORY OF THE FIRM

Product market concepts from industrial organization economics are integrated with financial valuation models of the firm to investigate relationships among systematic risk, capital intensity, and product market power. The theory of the firm facing uncertain input and output prices is extended to provide empirical models. Empirical results coincide with hypotheses derived from the theoretical model and pose questions about traditional single period hypotheses found in the finance literature.