Can crowdsourced data help investors take better decisions? This paper1 finds outperformance for firms that experience improvements in crowdsourced employer ratings. The sample used is based on over a million employee-level company reviews for more than a thousand firms obtained from Glassdoor, an employer review website, over the 2008-2016 period.
Decomposing employer ratings, the authors find that the return effect is related to changing employee assessments of career opportunities and views of senior management, but not to work-life balance. They conclude that employee reviews reveal information about the firm that is not yet reflected in stock prices.
We consider this paper to be a nice example of how big data may be used to enhance traditional quantitative investment strategies. As with many of these studies, however, some words of caution are also in place: the sample is relatively short, covering barely one economic cycle, and therefore also the statistical significance of the results is weak. Moreover, the required data is not easy to obtain and only covers a limited number of stocks. Nevertheless, big data in general has a lot of potential and is a topic that is also high on our research agenda.
1 Green, Huang, Wen & Zhou, “Crowdsourced Employer Reviews and Stock Returns”, SSRN working paper, no. 3002707, 2017.
The information contained in the website is solely intended for professional investors. Some funds shown on this website fall outside the scope of the Dutch Act on the Financial Supervision (Wet op het financieel toezicht) and therefore do not (need to) have a license from the Authority for the Financial Markets (AFM).
The funds shown on this website may not be available in your country. Please select your country website (top right corner) to view the products that are available in your country.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports, which can be all be obtained free of charge at this website and at the Robeco offices in each country where Robeco has a presence.