Abstract:
In manufacturing sector, firms are able to influence their stock returns by means of
risky cash flows due to their operating decisions. These decisions are not only
dependent on firm financial structures but also on their characteristics related to
product markets. Competition level among firms which represent firm distinctive
features is one of the important factor for the estimation of stock returns. Creative
destruction hypothesis and structure, conduct and performance paradigm are
channels in order to determine the relation between stock returns and competition.
Therefore, this relation is subject for finance and also microeconomy.
