RT Journal Article
SR Electronic
T1 Intra-Industry Uncertainty and Firm Valuation
JF The Journal of Investing
FD Institutional Investor Journals
SP joi.2019.1.091
DO 10.3905/joi.2019.1.091
A1 Wei Du
A1 Haizhi Wang
A1 Jianrong Wang
YR 2019
UL https://pm-research.com/content/early/2019/05/11/joi.2019.1.091.abstract
AB In this paper, we document evidence that intra-industry uncertainty has a positive relation with firm valuation. Specifically, the reduction of intra-industry uncertainty about firm future profitability leads to a decline of firm ME/BE ratios over time. We find that the positive relation is more prominent for firms in high-tech sectors and those with intensive product market competition. Our results are robust to the control of firm-level uncertainty and alternative measures of intra-industry uncertainty.TOPICS: Fundamental equity analysis, statistical methods