firm differentiation

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Text-Based Measures of Firm Position and Differentiation in Technology Space

Creators: Sam Arts; Bruno Cassiman; Jianan Hou (built on the DISCERN database by Ashish Arora, Sharon Belenzon & Lia Sheer)
Publication Date: 2023
Creators: Sam Arts; Bruno Cassiman; Jianan Hou (built on the DISCERN database by Ashish Arora, Sharon Belenzon & Lia Sheer)

Data and code that represent each firm–year technology portfolio as a vector built from the stemmed technical keywords in the firm’s patents (title, abstract, claims). Cosine similarity between vectors gives a text-based measure of how similar two firms are technologically, and of how differentiated a firm is. Built on DISCERN, which links roughly 1.35 million U.S. patents (1980–2015) to Compustat firms.

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