How does financial market concentration affect capital allocation? We propose a complete-markets model in which real investment and financial price impact are jointly determined in general equilibrium. We identify a two-way feedback mechanism whereby price impact induces misallocation and misallocation raises price impact. The mechanism is stronger if productivity is low or productivity dispersion is high. Given rising dispersion, the model can rationalize trends in corporate discount rates, cash holdings, investment, asset prices, and capital reallocation over the last two decades, even when market concentration is relatively stable. Overall, our findings suggest that financial market concentration may hamper allocative efficiency.

中文翻译：

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金融市场集中度与错配


金融市场集中度如何影响资本配置？我们提出了一个完全市场模型，其中实际投资和金融价格影响在一般均衡下共同决定。我们确定了一种双向反馈机制，即价格影响导致错配，错配又增加价格影响。如果生产率低或生产率分散度高，则该机制更强。鉴于分散性不断增强，即使市场集中度相对稳定，该模型也可以合理化过去二十年企业贴现率、现金持有量、投资、资产价格和资本重新配置的趋势。总体而言，我们的研究结果表明，金融市场集中度可能会阻碍配置效率。