Who Are My Peers? Labor Market Peer Firms Through Employees' Internet Co-Search Patterns

56 Pages Posted: 1 Feb 2015 Last revised: 8 Nov 2017

See all articles by Nan Li

Nan Li

University of Toronto - Rotman School of Management; University of Toronto at Scarborough - Division of Management

Date Written: November 1, 2017

Abstract

I propose a novel measure of firms that hire in the same talent pool analyzing employees’ internet co-search patterns on two major online labor markets: Glassdoor and LinkedIn. I classify co-searched firms as labor market peer firms (LMPs). LMPs (1) overlap but differ from standard product-market-based industry groupings; (2) exhibit significant incremental power to explain stock return and earning comovements; (3) outperform standard industry groupings to explain return comovements when LMPs share more labor market skills. Firms that are central in the LMP network pay higher salaries. My results highlight the potential of using the wisdom of employees - extracted from the internet - to measure fundamental linkages that are difficult to identify by standard industry measures.

Keywords: Online search, Labor market, Peer firms, Network analysis, Comovements, Stock Returns.

JEL Classification: D83, G0, J01, M2

Suggested Citation

Li, Nan, Who Are My Peers? Labor Market Peer Firms Through Employees' Internet Co-Search Patterns (November 1, 2017). Rotman School of Management Working Paper No. 2558271, Available at SSRN: https://ssrn.com/abstract=2558271 or http://dx.doi.org/10.2139/ssrn.2558271

Nan Li (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6
Canada
416-946-3126 (Phone)

University of Toronto at Scarborough - Division of Management ( email )

1265 Military Trial
Scarborough, Ontario M1C 1A4
Canada

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