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Labor market peer firms: understanding firms’ labor market linkages through employees’ internet “also viewed” firms

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  • Nan Li

    (University of Toronto)

Abstract

This paper studies the grouping of firms based on their labor-market connections, a significant departure from the traditional approach of grouping based on product-market connections. It also proposes a measure of labor market peers by analyzing the “also viewed” companies on two major online labor market platforms, LinkedIn and Glassdoor. Using the labor market peer measure, I examine whether firms that hire employees with similar skills and that are presumably exposed to the same labor-related risks and shocks exhibit a strong comovement of stock returns and accounting-based performance variables. I find that labor market peers overlap but differ from traditional product-market-based industry groupings, have significant incremental power to explain stock return and accounting-based performance measure comovements, and outperform traditional industry groupings in explaining return and wage comovements when a base firm shares more labor skills with its peers. Overall, the study highlights that labor market peers capture fundamental linkages between firms that are challenging to identify using traditional industry measures.

Suggested Citation

  • Nan Li, 2025. "Labor market peer firms: understanding firms’ labor market linkages through employees’ internet “also viewed” firms," Review of Accounting Studies, Springer, vol. 30(1), pages 384-435, March.
    • Handle: RePEc:spr:reaccs:v:30:y:2025:i:1:d:10.1007_s11142-024-09821-z
    DOI: 10.1007/s11142-024-09821-z
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    More about this item

    Keywords

    Peer firms; Labor market; Industry classification; Online search; LinkedIn; Glassdoor; Benchmarking;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G0 - Financial Economics - - General
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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