Competition for Talent: Evidence from a Network of Labor Market Peers

42 Pages Posted: 6 Apr 2022 Last revised: 27 Apr 2022

See all articles by Jae Hyoung Kim

Jae Hyoung Kim

Swedish House of Finance; Stockholm School of Economics

Date Written: February 18, 2022

Abstract

I construct a novel network of labor market peers that is denser and more centralized compared to product and capital market networks. Using my labor market network, I provide robust evidence that focal firms spend more on R&D and suffer more talent outflows when their labor market peers increase the benefits they offer their talented employees. Focal firms use capital markets to finance their labor market responses, issuing stock and increasing cash holdings. The findings highlight the predictive effect of firms’ labor market actions and provide evidence that ties labor markets and capital markets together.

Keywords: Networks, Peer Effects, Peer Groups, Talent Wars

JEL Classification: D83, D85, J33, O34

Suggested Citation

Kim, Jae Hyoung, Competition for Talent: Evidence from a Network of Labor Market Peers (February 18, 2022). Swedish House of Finance Research Paper No. 22-08, Available at SSRN: https://ssrn.com/abstract=4037878 or http://dx.doi.org/10.2139/ssrn.4037878

Jae Hyoung Kim (Contact Author)

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

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