Purpose This study examines whether peer effects influence corporate total factor productivity (TFP) in Chinese listed firms. Building on social network theories, we investigate how firms' peer networks shape peer influences on TFP, offering new insights into the role of firms' dynamics in productivity growth. Design/methodology/approach Using 18,626 firm-year observations from Chinese listed companies, we construct peer-effect networks to identify firms' focal peers. We also use social network metrics, i.e. structural holes to proxy peer influence. We employ panel regressions with firm and year fixed effects, and the Bartik-style instrumental variable in a two-stage least squares method as well as staggered triple difference-in-differences to mitigate endogeneity. We carry out robustness checks using alternative peer proxies, TFP and econometric models. Findings Peer effects significantly boost TFP, with stronger impacts for focal firms occupying central network positions (accessing peer information) or structural holes (leveraging niche knowledge). Knowledge and technology spillovers are the channels through which peer effects enhance TFP. Research limitations/implications Although we use four types of filters in constructing peers, the measurements of peer effects cannot fully capture the linguistic context to some extent, so that it is difficult to distinguish the detailed economic nature of mentions in the reports. Practical implications Proactive peer engagement is not merely competitive benchmarking but a critical channel for capability building. Locating within dynamic clusters or in proximity to high-performing peer leaders can provide informal, yet powerful, access to knowledge and technology spillovers. This can improve focal firms' TFP. Originality/value We construct the peer network as a proxy for peer effects, enabling us to identify the peer firms that merit the attention of focal firms. We also use a structural hole to measure a firm's marginality in the presence of imperfect market competition, which posits a firm's positional information within the network following Burt (2000). We also argue that enterprises actively engage in information exchange and knowledge spillovers. Our research provides a more nuanced understanding of the micro-foundations through which peer dynamics contribute to productivity growth.
Ren et al. (Mon,) studied this question.