Working papers:
[1] Competition and New Product Introductions: Evidence from the Pharmaceutical Industry
with Sudipto Dasgupta and Fangyuan Ma
Abstract: When there is uncertainty about a new product’s net value, firms treat the timing of the product launch as a real option. When the potential cannibalization costs imposed on existing products are important, the timing decisions are sensitive to competitors’ actions, as they affect these costs. In the pharmaceutical industry, we show that firms often delay new launches until generic entry threats reduce cannibalization costs. This effect is stronger in therapeutic areas with uncertain generic entry and among firms focused on the commercialization of innovation. Our findings highlight how competition can foster innovation by accelerating the commercialization of new products. [SSRN Link]
Best Paper Award from Greater Bay Area Finance Workshop (2024)
Scheduled Presentation: FMA(2025), SFA(2025)
Presented at CICF(2025), AsianFA (2025), ACFOW(2024); Greater Bay Area Finance Workshop (2024); PHBS-CUHKSZ Workshop (2024)
[2] Analysts’ Feedback, Market Pressure, and New Product Introductions
with Sudipto Dasgupta and Fangyuan Ma
Abstract: This study examines how security analysts affect firms’ strategic responses to competitors’ product announcements. We hypothesize that analysts closely monitor new product launches, providing feedback and creating pressure that amplifies firms’ strategic reactions. Using data from 2002 to 2017, we find that firms are more likely to introduce new products following rivals’ announcements when they share common analysts. Moreover, positive recommendation revisions by common analysts further intensify firms’ reactions, whereas revisions from non-common analysts covering the same rivals elicit no significant response. This suggests that analysts actively shape competitive behavior rather than merely linking firms with similar fundamentals. Further analysis identifies two key mechanisms. First, common analysts paying more attention to product announcements facilitate product-related information spillovers. Second, common analyst coverage heightens investor comparisons, increasing the pressure on managers when their firms underperform. Our findings highlight the critical role of security analysts in shaping competitive dynamics and influencing the timing of new product launches. [SSRN Link]
Presented at AsianFA (2024)
Scheduled Presentation: FMA(2025), SFA (2025)
[3] Social Media Reactions to Product Announcements and Competitive Response
with Ph.D. Candidate Yuan Meng
Abstract: We examine whether firms’ product market strategies are associated with social media reactions to competitors’ product announcements. We document that product announcements trigger heightened discussions on social media. Firms adjust their product offerings to a greater extent in the following year when their competitors’ new products attract strong social media attention, which is further amplified by favorable sentiment. Furthermore, high attention is linked to greater product differentiation, while positive sentiment correlates with convergence in product offerings when attention is moderate. These effects persist after controlling for alternative information channels, product market dynamics, and firm characteristics. We argue that social media serves as a valuable external source of real-time, crowdsourced information on the consumer side, reflecting potential consumer base and preferences for new products. This is evidenced by results showing the baseline associations are driven by product-related discussions and stronger in market-oriented industries.
Working in progress:
[4] Contract Violation and Product Market Competition, with Ph.D. Candidate Yuan Meng
[5] Economic Policy Uncertainty and Commercialization of Innovation