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Firms’ Camouflage: How Do Firms Deter Potential Rivals?

Academy of Management Proceedings, ISSN: 0065-0668, Vol: 2024, Issue: 1
2024
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Article Description

This study presents evidence that firms can employ accounting techniques as a camouflage to deter market entry. We theorize that incumbent firms have the incentives to use accounting techniques to influence how potential rivals assess and evaluate the profitability of the market space of the incumbent firms. Using a panel data of publicly traded firms, our findings provide strong support for our theory.

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