Text-Based Network Industries and Endogenous Product Differentiation / Gerard Hoberg, Gordon M. Phillips.

Format:

Book

Author/Creator:

Hoberg, Gerard.

Contributor:

National Bureau of Economic Research.

Phillips, Gordon M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15991.

NBER working paper series no. w15991

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2010.

Summary:

We study how firms differ from their competitors using new time-varying measures of product differentiation based on text-based analysis of product descriptions from 50,673 firm 10-K statements filed yearly with the Securities and Exchange Commission. This year-by-year set of product differentiation measures allows us to generate a new set of industries and corresponding new measures of industry competition where firms can have their own distinct set of competitors. Our new sets of industry competitors better explain specific discussion of high competition by management, rivals identified by managers as peer firms and firm characteristics such as profitability and leverage than do existing classifications. We also find evidence that firm R&D and advertising are associated with subsequent differentiation from competitors, consistent with theories of endogenous product differentiation.

Notes:

Print version record

May 2010.