A LTHOUGH much research has been done IA-t on the relationships between industrial structure and performance, important puzzles persist. Specifically, it remains unclear whether profits rise with industry concentration when other structural variables, such as market share, are appropriately held constant. Also, what economic phenomena underlie the observed positive profit-market share associations'? This paper seeks to clarify these relationships. Until recently, data limitations have restricted cross-sectional structure-performance analyses to either industry level variables or firm level variables which aggregate quite different activities within a single corporate financial statement.' These limitations are overcome by the Federal Trade Commission's Line of Business survey, which compiles financial statistics disaggregated to the of business (LB) level. A line of refers to a firm's operations in one of 261 manufacturing and 14 nonmanufacturing categories defined by the FTC. The number of LBs per company ranges from I to 47, with an average of 8 lines per company. For each LB, information on pretax profit, advertising, research and development, assets, market share, diversification and vertical integration is reported. When combined with census and input-output data, the FTC line of data allow the estimation of a structure-performance equation of unprecedented richness. A primary emphasis is placed on the theoretical and empirical differences between variables measured at the LB and industry level. To accomplish this task and to relate this paper to the previous literature, regressions are performed at both the LB and industry level.

ABSTRACT This paper examines foreign direct investment by studying shareholder wealth gains for 1273 U.S. firms acquired during the period 1970‐1987. Three findings stand out. First, cross‐border takeovers are more frequent in research and development intensive industries than are domestic acquisitions; furthermore, in three‐fourths of cross‐border transactions the buyer and seller are in related industries. These industry patterns suggest that costs and imperfections in product markets play an important role in foreign direct investment. Second, targets of foreign buyers have significantly higher wealth gains than do targets of U.S. firms. This cross‐border effect is comparable in size to the wealth effects of all‐cash and multiple bids, two effects receiving substantial attention in the finance literature, and is robust to inclusion of these two variables. Third, while the cross‐border effect on wealth gains is not well explained by industry and tax variables, it is positively related to the weakness of the U.S. dollar, indicating a significant role for exchange rate movements in foreign direct investment.

Hedge funds display several interesting characteristics that may influence performance, including: flexible investment strategies, strong managerial incentives, substantial managerial investment, sophisticated investors, and limited government oversight. Using a large sample of hedge fund data from 1988–1995, we find that hedge funds consistently outperform mutual funds, but not standard market indices. Hedge funds, however, are more volatile than both mutual funds and market indices. Incentive fees explain some of the higher performance, but not the increased total risk. The impact of six data‐conditioning biases is explored. We find evidence that positive and negative survival‐related biases offset each other.

Hedge funds display several interesting characteristics that may influence performance, including: flexible investment strategies, strong managerial incentives, substantial managerial investment, sophisticated investors, and limited government oversight. Using a large sample of hedge fund data from 1988–1995, we find that hedge funds consistently outperform mutual funds, but not standard market indices. Hedge funds, however, are more volatile than both mutual funds and market indices. Incentive fees explain some of the higher performance, but not the increased total risk. The impact of six data‐conditioning biases is explored. We find evidence that positive and negative survival‐related biases offset each other.