Employees’ voluntary disclosures about business outlook and labor investment efficiency

53 Pages Posted: 8 Jun 2021

See all articles by Boochun Jung

Boochun Jung

University of Hawaii at Manoa - School of Accountancy

Yiding Wang

University of Houston - Downtown

Sijing Wei

Creighton University - Heider College of Business

Jiarui (Iris) Zhang

California State University, Long Beach

Date Written: June 6, 2021

Abstract

We examine how employees’ voluntary disclosures about business outlook are related to labor investment efficiency by using data from Glassdoor.com. We hypothesize that due to the popularity and informativeness of employee voluntary disclosure through social media as a form of crowd wisdom in labor markets, more positive business outlook disclosed by employees can significantly reduce firms’ labor adjustment costs by attracting more job applicants in a timely matter, resulting in higher labor investment efficiency. Consistent with the hypothesis, we document that positive employees’ business outlook disclosures enhance labor investment efficiency by reducing both over-investment and under-investment in labor. We mitigate endogeneity concern by employing sub-sample analysis and Anti-SLAPP laws as an exogenous shock.

Keywords: Voluntary disclosure; EmployeesGlassdoor.com; Labor investment efficiency; Labor adjustment costs; Labor skill; Cost stickiness

JEL Classification: M41

Suggested Citation

Jung, Boochun and Wang, Yiding and Wei, Sijing and Zhang, Jiarui, Employees’ voluntary disclosures about business outlook and labor investment efficiency (June 6, 2021). Available at SSRN: https://ssrn.com/abstract=3861033 or http://dx.doi.org/10.2139/ssrn.3861033

Boochun Jung (Contact Author)

University of Hawaii at Manoa - School of Accountancy ( email )

College of Business Administration
Honolulu, HI 96822
United States

Yiding Wang

University of Houston - Downtown ( email )

105 Main ST. Shea Building
Houston, TX 77005
United States

Sijing Wei

Creighton University - Heider College of Business ( email )

602 N 20th St
Omaha, NE Nebraska 68102
United States
402-280-1297 (Phone)

HOME PAGE: http://https://business.creighton.edu/

Jiarui Zhang

California State University, Long Beach ( email )

1250 Bellflower Blvd
Long Beach, CA 90064
United States

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