Market share, firm innovation, and idiosyncratic volatility

In this study, we reexamine the link between a firm’s market share and its idiosyncratic volatility. Contrary to extant research, we find that market share is not a determinant of idiosyncratic volatility. Innovative firms continuously innovate resulting in an increase in market share. However, high market share firms may not necessarily increase investment in innovative ventures to maintain market share. Hence an increase in market share does...