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Data Assets and Industry Competition: Evidence from 10-K Filings

65 Pages Posted: 13 Dec 2014 Last revised: 22 Oct 2015

Adam Saunders

University of British Columbia (UBC) - Sauder School of Business

Prasanna Tambe

New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Information, Operations, and Management Sciences

Date Written: September 18, 2015

Abstract

This paper constructs new, longitudinal measures of corporate data practices by conducting textual analysis of annual 10-K filings from 1996 to 2012. We provide descriptive evidence of a dramatic increase in data-related activities over this period, beginning in IT-producing firms and then moving to other sectors. Next, we demonstrate that these measures are positively and significantly correlated with Tobin’s q and higher profits relative to the mean of a firm’s six-digit NAICS industry. These findings are consistent with the argument that data assets are driving performance dispersion within IT-using industries, in which data-intensive firms are outperforming their competitors. Finally, we use dimension reduction techniques to demonstrate that premiums in market value accrued to data collection activities in the early 2000s, and to data quality initiatives (i.e., standardization and security) after 2007.

Keywords: IT and Competition, IT and Business Value, Textual Analysis, Tobin’s q, Firm-Specific Profits, Data-Driven Practices

Suggested Citation

Saunders, Adam and Tambe, Prasanna, Data Assets and Industry Competition: Evidence from 10-K Filings (September 18, 2015). Available at SSRN: https://ssrn.com/abstract=2537089 or http://dx.doi.org/10.2139/ssrn.2537089

Adam Saunders (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

673 Henry Angus
2053 Main Mall
Vancouver, British Columbia V6T 1Z2
Canada
604-822-9956 (Phone)

HOME PAGE: http://www.sauder.ubc.ca/Faculty/People/Faculty_Members/Saunders_Adam

Prasanna Tambe

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
New York, NY NY 10012
United States

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )

44 West Fourth Street
New York, NY 10012
United States

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