Abstract

http://ssrn.com/abstract=1520062
 
 

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Text-Based Network Industries and Endogenous Product Differentiation


Gerard Hoberg


University of Southern California - Marshall School of Business

Gordon M. Phillips


Tuck School of Business at Dartmouth; National Bureau of Economic Research (NBER)

July 3, 2015

Journal of Political Economy, Forthcoming

Abstract:     
We study how firms differ from their competitors using new time-varying measures of product similarity based on text-based analysis of firm 10-K product descriptions. This year-by-year set of product similarity measures allows us to generate a new set of industries where firms can have their own distinct set of competitors. Our new sets of competitors explain specific discussion of high competition, rivals identified by managers as peer firms and changes to industry competitors following exogenous industry shocks. We also find evidence that firm R&D and advertising are associated with subsequent differentiation from competitors, consistent with theories of endogenous product differentiation.

Number of Pages in PDF File: 69

Keywords: Industry Classifications, Endogenous Barriers to Entry, Product Market Competition, Product Differentiation


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Date posted: December 9, 2009 ; Last revised: July 4, 2015

Suggested Citation

Hoberg, Gerard and Phillips, Gordon M., Text-Based Network Industries and Endogenous Product Differentiation (July 3, 2015). Journal of Political Economy, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1520062 or http://dx.doi.org/10.2139/ssrn.1520062

Contact Information

Gerard Hoberg
University of Southern California - Marshall School of Business ( email )
Marshall School of Business
Los Angeles, CA 90089
United States
HOME PAGE: http://www-bcf.usc.edu/~hoberg/
Gordon M. Phillips (Contact Author)
Tuck School of Business at Dartmouth ( email )
Hanover, NH 03755
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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