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Firms' organisation capital: Do peers matter?

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  • Khoo, Joye
  • Cheung, Adrian (Wai Kong)

Abstract

This paper explores the role of industry-level factor in determining organisation capital. Using US dataset, we show evidence that peers' organisation capital matters, and firms mimic their peers in formulating organisation capital. We also find that mimicking behaviour is more pronounced for firms operating in competitive product markets and environments with more information asymmetry, as is consistent with theoretical explanations for why firms imitate each other. Our results are robust to alternative measures of organisation capital and endogeneity concerns.

Suggested Citation

  • Khoo, Joye & Cheung, Adrian (Wai Kong), 2024. "Firms' organisation capital: Do peers matter?," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    • Handle: RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005519
    DOI: 10.1016/j.irfa.2024.103619
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    More about this item

    Keywords

    Organisation capital; Peer effect; Mimicking; Industry effect;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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