Skip to main content

An intra- and inter-industry evaluation of three classification schemes common in capital market research

Buy Article:

$53.17 plus tax (Refund Policy)


We compare the Standard Industry Classification (SIC), the North American Industry Classification System (NAICS) and the Global Industry Classification Standard (GICS) schemes in their effectiveness to group stocks with similar operating characteristics. We are the first to analyse and compare individual functional category levels within and across each industry classification and test whether the three industry classifications show significant improvement in homogeneity with finer industry partitions across a wide range of research applications. Our results suggest that the GICS system offers advantages over the other two systems in grouping firms across all its levels of industry categories and across different application schemes common to capital market research. However, the SIC and NAICS offer additional advantages across their finest industry partitions. Our study has important implications for users of industry classifications in various financial and economic analyses, research settings and regulatory contexts.

Keywords: C15; G10; GICS; homogeneity; industry classification; performance

Document Type: Research Article


Affiliations: 1: Beedie School of Business, Simon Fraser University, Burnaby, V5A 1S6, Canada 2: Sauder School of Business, University of British Columbia, Vancouver, V6T 1Z2, Canada

Publication date: June 13, 2014

More about this publication?

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Partial Open Access Content
Partial Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more