| I show that labor market peer firms (LMPs) provide a new measure of economic linkages among firms. I identify LMPs by analyzing members' online viewing patterns on LinkedIn, a professional networking and corporate recruiting website. LMPs exhibit significant incremental power over standard output-market-based industry groupings to explain cross-sectional variation in base firms' stock returns and accounting-based performance metrics. I also create a measure of similarity across firms using LinkedIn members' self-reported labor market skills. When LMPs share more skills with the base firm, LMPs outperform standard industry groupings to explain return comovements. Overall, this paper highlights the importance of firms' labor market linkages in measuring their exposure to common shocks. |
