Publications and Research
Document Type
Article
Publication Date
9-1971
Abstract
It appears to a widely held view that corporations with similar operational characteristics ought to have similar financial characteristics. For example, one might expect that the financial characteristics of two drug companies would be similar. This seems entirely reasonable. Unfortunately however, there does not appear to be any quantitative analysis of this point in the literature. Furthermore, discussions with our financial colleagues lead to the conclusion that, if such financial differentiation of corporations were possible, it is by no means obvious what the variables of differentiation would be. Consequently, such an analysis was undertaken and is described in this paper.
The basic question asked is whether the statistical grouping of corporations by their financial characteristics is similar to their predetermined, external, industrial classification.
Included in
Corporate Finance Commons, Finance and Financial Management Commons, Management Information Systems Commons, Management Sciences and Quantitative Methods Commons
Comments
This article originally appeared in the Journal of Financial and Quantitative Analysis.