Using accounting measures of (in)tangibility for organizational classifications

We present an empirical test of a new measure to classify organizations according the tangibility product (output) flows delivered customers. Our exhibits consequences using standard industrial classifications assume that firms within same industry either share identical properties or sell homogeneous products. To illustrate misleading findings can result from these assumptions, we investigate whether prior literature on capital structure provides sensible interpretation organizational behavior, based as it often is assumption all given classification durable goods. In contrast product-market upon trade-off theory structure, would predict selling physical goods will have proportionately less debt, in fact, when industries are classified our measure, find contrary. intention not displace existing systems but is, rather, highlight dangers drawing conclusions assuming homogeneity amongst which formally registered industry.