Finance Theses and Dissertations

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When Life Gives You Lemons: Competition, Diversification, and Firm Resilience
(University of Oregon, 2024-08-07) Gamrat, Gretchen; Chalmers, John
This study explores how product market competition and diversification relate to private and public firmresilience. Using retail scanner data, I construct firm-level measures of competition and product diversification closer to the product level and leverage the 2008 financial crisis and COVID-19 pandemic as sources of plausibly exogenous variation. Private firms tend to be smaller, less diversified, face greater competition and have greater revenue growth volatility. During the 2008 financial crisis and COVID-19 pandemic, higher market competition is significantly correlated with reduced revenue growth and revenue growth volatility. More diversified public and private firms experience reduced revenue growth volatility in non-crisis periods. However, diversification’s risk reduction capabilities significantly weaken during the COVID-19 pandemic.