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
Date Written: November 1, 2017
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
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