Northampton Electronic Collection of Theses and Research

Do peer firms influence innovation?

Machokoto, M., Gyimah, D. and Ntim, C. (2021) Do peer firms influence innovation? British Accounting Review. 0890-8389.

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Machokoto_etal_2021_BAR_Do_peer_firms_influence_innovation.pdf - Accepted Version
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Abstract:
Using a large sample of 4,545 US firms over the period 1968-2018, we find robust and significant positive peer effects on corporate innovation. Consistent with the need to keep ahead or abreast of rivals, we document an increase in peer firms' influence with product market competition. Our further analyses show interesting leader-follower interactions with firms following or adopting innovation policies of counterparts perceived or likely to have superior information. This finding supports the information-based motives of mimicking. More importantly, we show that adopting peers' innovation policies is associated with improvements in long-term innovation outputs and product market performance. Our results suggest that peer effects are a critical determinant of corporate innovation in addition to other factors examined so far in the literature.
Uncontrolled Keywords:
Research and development (R\&D), innovation, peer effects, product market competition, heterogeneity effects, mimicking
Creators:
Machokoto, M., Gyimah, D. and Ntim, C.
Faculties, Divisions and Institutes:
Faculties > Faculty of Business & Law > Accounting & Finance
Date:
29 January 2021
Date Type:
Acceptance
Journal or Publication Title:
British Accounting Review
Number of Pages:
60
Language:
English
DOI:
10.1016/j.bar.2021.100988
ISSN:
0890-8389
Status:
Published / Disseminated
Refereed:
Yes
Related URLs:
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