A method to address the effectiveness of the SIC code for selecting comparable firms

To find peer firms is very important in several situations, for example in equity valuation using multiples for publicly traded firms, as well as for not publicly traded ones. Very often the pay of CEOs is set at the basis of a peer compensation group. Financial policies are often driven by a response to peers. It is a very common approach to use industry membership given by the SIC code to form peer groups. In the paper the effectiveness of the SIC (Standard Industrial Classification) code for selecting comparable firms is evaluated through nonparametric testing for difference in firm financial ratios.

识别可比公司（peer firms）在诸多场景中均具有重要意义，例如针对上市公司与非上市公司采用乘数法开展股权估值时。首席执行官的薪酬通常基于可比薪酬群体制定，企业财务政策也往往会效仿同行进行调整。当前学界与实务界普遍采用标准行业分类（Standard Industrial Classification, SIC）代码所界定的行业归属来构建可比公司群体。本文通过非参数检验企业财务比率的差异，评估了SIC代码在遴选可比公司方面的有效性。