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http://ssrn.com/abstract=1520062
 
 

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Text-Based Network Industries and Endogenous Product Differentiation


Gerard Hoberg


University of Maryland - Department of Finance

Gordon M. Phillips


University of Southern California; National Bureau of Economic Research (NBER)

July 15, 2013


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: 53

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

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Date posted: December 9, 2009 ; Last revised: July 17, 2013

Suggested Citation

Hoberg, Gerard and Phillips, Gordon M., Text-Based Network Industries and Endogenous Product Differentiation (July 15, 2013). Available at SSRN: http://ssrn.com/abstract=1520062 or http://dx.doi.org/10.2139/ssrn.1520062

Contact Information

Gerard Hoberg (Contact Author)
University of Maryland - Department of Finance ( email )
Robert H. Smith School of Business
Van Munching Hall
College Park, MD 20742
United States
HOME PAGE: http://www.rhsmith.umd.edu/finance/faculty/hoberg.aspx
Gordon M. Phillips
University of Southern California ( email )
Marshall School of Business
Los Angeles, CA 90089
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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