Firms' organisation capital: Do peers matter?

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.