اثرات همتراز در تصمیم گیری
Abstract
1- Introduction
2- Literature review
3- Hypothesis development
4- Research design, sample selection and summary statistics
5- The role and implications of the peer effect
6- Channels of identification
7- Heterogeneity in peer effect
8- Economic consequences of peer effect
9- Conclusion
References
Abstract
We show that peer effects influence corporate investment decisions. Using a sample of China’s listed firms from 1999 to 2012, we show that a one standard deviation increase in peer firms’ investments is associated with a 4% increase in firm i’s investments. We further identify the mechanisms, conditions and economic consequences of peer effects in firms’ investment decisions. We find that peer effects are more pronounced when firms have information advantages and the information disclosure quality of peer firms is higher, or if they face more fierce competition. When firms are industry followers, are young or have financial constraints, they are highly sensitive to their peers firms. We also quantify the economic consequences generated by peer effects, which can increase firm performance in future periods.
Introduction
It is common for corporations to interact with peer firms in decision-making, such as signing strategic cooperating agreements and developing marketing strategies. Previous studies show that peer firms play an important role in shaping a variety of corporate policies, such as product pricing (Bertrand, 1883) and advertising (Stigler, 1968), but the effect of peer-firm behavior on corporate financial policy is often ignored in empirical research, or at most assumed to operate through an unmeasured effect on firm-specific determinants. Recent studies examine whether the characteristics or behavior of peer firms affect corporate capital structure (Leary and Roberts, 2014), mergers and acquisitions (Bizjak et al., 2009) and tax avoidance (Li et al., 2014). Investment decisions are important and determine corporate development. Most studies that examine peer effects in corporate investment suggest that managers can gain useful information from the stock price of peer firms. Edmans et al. (2012a, 2012b) and Bond et al. (2012) point out that stock prices include information that is helpful in guiding a firm’s investment policy, such as industry growth opportunities, external environment, competitor strategy and consumer demands. Valuing the stock price of peer firms can therefore capture useful information to help reduce investment uncertainty. Ozoguz and Rebello (2013) find that firms’ investment policy reacts appropriately to volatility in a peer firms’ stock price. Using U.S. listed firms from 1996 to 2008, Foucault and Fresard (2014) find that the valuation of peers matters for a firm’s investment: a one standard deviation increase in a peers’ valuation is associated with a 5.9% increase in corporate investment. Fracassi (2012) and Dougal et al. (2012) provide similar empirical results. However, few studies investigate whether managers directly mimic the investment behavior of peer firms. In this study, we predict that firms’ investment behavior is influenced by peer firms’ investment decisions, and provide empirical evidence to support the prediction.