You signed in with another tab or window. Reload to refresh your session.You signed out in another tab or window. Reload to refresh your session.You switched accounts on another tab or window. Reload to refresh your session.Dismiss alert
Cao, Ma, Tucker, and Wan (2018), 'Technological Peer Pressure and Product Disclosure', The Accounting Review, Vol 93 (6), pp 95-126.
Download the reference here
Variable Definition
$$TPP = log(1+\frac{\sum_{j \ne i}\omega_{ij}\times G_{j,t}}{G_{j,t}})$$ where $j$ represents firm $i$’s rival (any firm that overlaps
with firm $i$ in the product markets), $t$ represents the fiscal year, $G$ is a firm’s R&D
stock, and $\omega_{ij}$ is the closeness weight. Specifically, $G$ is a firm’s cumulative R&D
investments in preceding years with the value of investments decaying by 15% as each
year passes, i.e., $G_t = RND_t + (1-0.15)G_{t-1}$, where $RND_t$ is the firm’s R&D expenses
in year $t$. $\omega_{ij}$ captures the spatial distance in the product markets between firms $i$ and
$j$ using industry segment sales: $$\omega_{ij} \equiv cos(\theta_{ij}) = \frac{V_i}{\parallel V_i \parallel} \cdot \frac{V_j}{\parallel V_j \parallel}$$
where $V_{i}$ is the vector of firm $i$’s sales with the $k^{th}$
element being the share of firm $i$’s total sales in the preceding two years made in
industry (4-digit SIC) $k$. A higher value of TPP indicates more intense competition
faced by the sample firm.