Data Assets and Industry Competition: Evidence from 10-K Filings

This paper constructs new, longitudinal measures of corporate data practices by conducting textual analysis of annual 10-K filings from 1996 to 2012. We provide descriptive evidence of a dramatic increase in data-related activities over this period, beginning in IT-producing firms and then moving to other sectors. Next, we demonstrate that these measures are positively and significantly correlated with Tobin’s q and higher profits relative to the mean of a firm’s six-digit NAICS industry. These findings are consistent with the argument that data assets are driving performance dispersion within IT-using industries, in which data-intensive firms are outperforming their competitors. Finally, we use dimension reduction techniques to demonstrate that premiums in market value accrued to data collection activities in the early 2000s, and to data quality initiatives (i.e., standardization and security) after 2007.