The impact of industry classification schemes on financial research
This paper investigates industry classification systems. During the last 50 years there has been a considerable discussion of problems regarding the classification of economic data by industries. From my perspective, the central point of each classification is to determine a balance between aggregation of similar firms and differentiation between industries. This paper examines the structure and content of industrial classification schemes and how they affect financial research. I use classification systems provided by the Worldscope and the Compustat database. First, this study gives a detailed description of the structure and methodology of industrial classification systems and the relevance in leading finance and accounting journals. Second, I construct a benchmark classification system to measure the performance of different systems and provide evidence that some systems a more homogeneous in terms of value drivers than others. Third, I examine how multiple valuation is influenced by industry classification and show that the results vary significantly for different systems.
Year of publication: |
2005
|
---|---|
Authors: | Weiner, Christian |
Publisher: |
Berlin : Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk |
Saved in:
freely available
Series: | SFB 649 Discussion Paper ; 2005,062 |
---|---|
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 512455880 [GVK] hdl:10419/25081 [Handle] |
Source: |
Persistent link: https://www.econbiz.de/10010263614
Saved in favorites
Similar items by person
-
Selecting comparables for the valuation of European firms
Dittmann, Ingolf, (2005)
-
The conglomerate discount in Germany and the relationship to corporate governance
Weiner, Christian, (2005)
-
Worldscope meets Compustat: a comparison of financial databases
Ulbricht, Niels, (2005)
- More ...