Open AccessPosted Content
Text-Based Network Industries and Endogenous Product Differentiation
Gerard Hoberg,Gordon M. Phillips +1 more
TLDR
The authors 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.Abstract:
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 differentiationread more
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Machine Learning: An Applied Econometric Approach
Sendhil Mullainathan,Jann Spiess +1 more
TL;DR: This work presents a way of thinking about machine learning that gives it its own place in the econometric toolbox, and aims to make them conceptually easier to use by providing a crisper understanding of how these algorithms work, where they excel, and where they can stumble.
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Textual Analysis in Accounting and Finance: A Survey
Tim Loughran,Bill McDonald +1 more
TL;DR: In this paper, the authors describe the nuances of the textual analysis and some of the tripwires in implementation and highlight the contemporary textual analysis literature and highlight areas of future research.
Journal ArticleDOI
Textual Analysis in Accounting and Finance: A Survey
Tim Loughran,Bill McDonald +1 more
TL;DR: This survey describes the nuances of the method and, as users of textual analysis, some of the tripwires in implementation and reviews the contemporary textual analysis literature to highlight areas of future research.
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Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence
TL;DR: It is shown that CSR decreases systematic risk and increases firm value and these effects are stronger for firms producing differentiated goods and when consumers' expenditure share on CSR goods is small.
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Competition and the Cost of Debt
TL;DR: The authors empirically showed that the cost of bank debt is systematically higher for firms that operate in competitive product markets, and that the effect of competition is greater in industries in which small firms face financially strong rivals, in industries with intense strategic interactions between firms and in illiquid industries.
References
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Stability in Competition
TL;DR: In this paper, it was shown that if the purveyor of an article gradually increases his price while his rivals keep theirs fixed, the diminution in volume of his sales will in general take place continuously rather than in the abrupt way which has tacitly been assumed.
Journal ArticleDOI
Industry costs of equity
Eugene F. Fama,Kenneth R. French +1 more
TL;DR: In this paper, the authors show that standard errors of more than 3.0% per year are typical for both the CAPM and the three-factor model of Fama and French (1993), and these large standard errors are the result of uncertainty about true factor risk premiums and imprecise estimates of the loadings of industries on the risk factors.
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Automobile prices in market equilibrium
TL;DR: In this article, the authors developed techniques for empirically analyzing demand and supply in differentiated products markets and then applied these techniques to analyze equilibrium in the U.S. automobile industry.
Posted Content
Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value
TL;DR: In this article, the authors present evidence that firms' patents, profits and market value are systematically related to the technological position of firms' research programs, and that firms are seen to "move" in technology space in response to the pattern of contemporaneous profits at different positions.
Posted Content
When is a Liability not a Liability? Textual Analysis, Dictionaries, and 10-Ks
Tim Loughran,Bill McDonald +1 more
TL;DR: This article developed an alternative negative word list, along with five other word lists, that better reflect tone in financial text and linked the word lists to 10 K filing returns, trading volume, return volatility, fraud, material weakness, and unexpected earnings.
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