To make high-quality research more accessible and easier to explore.

Fields:

Import Competition and the Stock Market Return to Capital

American Economic Review 1989 79(5), 1065-1087
We measure the responsiveness of returns to capital invested in six U.S. industries to shocks to the prices of competing import goods. Unanticipated, positive shocks to import prices cause higher than normal stock market returns in all six industries. The magnitudes of these responses are consistent with the hypothesis that capital is highly specific to its sector of use in five of the six industries studied.