High-q firms are those with q above the sample median
Despite the similarity of some subgroups with the sample median
, the median returns of the remaining subgroups differed more substantially (especially for trips placing a different number of sets or landing in a different region).
Although the sample mean is more efficient than the sample median
when the data are drawn from a normal distribution, this will not be true in general.
it] = 1 if growth rate (GROWTH) for firm i in year t is above the sample median
, and 0 if otherwise.
While sample medians
appear to suggest some closing of the gap between diversifiers and matched-sample firms, diversifiers still spend less on R&D relative to assets after the segment change.
bi] is computed iteratively, starting with the sample median