A Measure of Competition Based on 10-K Filings

• 成果类型: Article
• 署名作者: Li, Feng; Lundholm, Russell; Minnis, Michael
• 署名单位: University of Michigan System; University of Michigan; University of British Columbia; University of Chicago
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2012.00472.x
• 发表日期: 2013
• 页码: 399-436
• 关键词: time-series properties; capital-market; profitability; disclosure; COSTS; PROPRIETARY; INVESTMENT; forecasts; earnings

摘要

In this paper we develop a measure of competition based on management's disclosures in their 10-K filing and find that firms' rates of diminishing marginal returns on new and existing investment vary significantly with our measure. We show that these firm-level disclosures are related to existing industry-level measures of disclosure (e. g., Herfindahl index), but capture something distinctly new. In particular, we show that the measure has both across-industry variation and within-industry variation, and each is related to the firm's future rates of diminishing marginal returns. As such, our measure is a useful complement to existing measures of competition. We present a battery of specification tests designed to explore the boundaries of our measure and how it varies with the definition of industry and the presence of other measures of competition.