Economic theory suggests that profits of firms in industries with higher competition are less persistent and more volatile than in industries with lower competition (Stigler, 1963; Mueller, 1977). Extending this reasoning, I hypothesize that accounting-based fundamentals are more effective in predicting performance in industries with lower competition. I find that a measure of fundamentals (Piotroski’s F-score) has greater ability to identify potentially mispriced securities in industries with lower competition. The results are robust to using a variety of competition measures and imply that industry competition is an important consideration in the application of fundamental analysis.

中文翻译：

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行业竞争与基本面分析

经济理论表明，与竞争程度较低的行业相比，竞争程度较高的行业中公司的利润持久性和波动性较小（Stigler，1963； Mueller，1977）。扩展此推理，我假设基于会计的基本原理在预测竞争较低的行业中的绩效方面更为有效。我发现，一定程度的基本面（Piotroski的F分数）可以在竞争程度较低的行业中识别出潜在定价错误的证券。该结果对于使用各种竞争手段是有力的，并且表明行业竞争是应用基础分析时的重要考虑因素。