Industry Concentration, Firm Efficiency and Average Stock Returns: Evidence from Australia
Thu A. T. Pham ()
Additional contact information
Thu A. T. Pham: University of Economics Ho Chi Minh City
Asia-Pacific Financial Markets, 2018, vol. 25, issue 3, No 3, 247 pages
Abstract This study examines the relationship between industry concentration and level of firm efficiency and their effect on cross-sectional stock returns in Australian market. Our analysis shows that industry concentration and firm efficiency have independent effects on stock returns. By forming 25 double-sorted portfolios based on industry concentration and firm efficiency, INEFFICIENT firms in concentrated industry earn highest stock returns, while EFFICIENT firms in concentrated industry earn lowest stock returns. Also we find that industry concentration appears to be associated with market share while efficiency has a greater effect on firm earnings. In our cross-sectional regressions, industry concentration shows a positive relationship with average stock returns while firm efficiency shows a negative association with average stock returns. The concentration and efficiency effects are persistent throughout the sample period and is robust after controlling for size and book-to-market.
Keywords: Asset pricing; Industry concentration; Firm efficiency; Stochastic frontier approach (search for similar items in EconPapers)
JEL-codes: G11 G12 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10690-018-9246-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:apfinm:v:25:y:2018:i:3:d:10.1007_s10690-018-9246-5
Ordering information: This journal article can be ordered from
Access Statistics for this article
Asia-Pacific Financial Markets is currently edited by Jiro Akahori
More articles in Asia-Pacific Financial Markets from Springer, Japanese Association of Financial Economics and Engineering
Bibliographic data for series maintained by Sonal Shukla ().