united kingdomen
Using crowdsourced employer reviews to select stocks

Using crowdsourced employer reviews to select stocks

28-09-2018 | From the field

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.

  • David Blitz
    David
    Blitz
    Head of Quant Research

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.

From the field
From the field

Our researchers publish many whitepapers based on their own empirical studies; they also follow quantitative research done by others.

Read all articles
Subjects related to this article are:
Logo

Disclaimer

Please read this important information before proceeding further. It contains legal and regulatory notices relevant to the information contained on this website.

The information contained in the Website is NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws. The value of the investments may fluctuate. Past performance is no guarantee of future results. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency.

In the UK, Robeco Institutional Asset Management B.V. (“ROBECO”) only markets its funds to institutional clients and professional investors. Private investors seeking information about ROBECO should visit our corporate website www.robeco.com or contact their financial adviser. ROBECO will not be liable for any damages or losses suffered by private investors accessing these areas.

In the UK, ROBECO Funds has marketing approval for the funds listed on this website, all of which are UCITS funds. ROBECO is authorized by the AFM and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.

Many of the protections provided by the United Kingdom regulatory framework may not apply to investments in ROBECO Funds, including access to the Financial Services Compensation Scheme and the Financial Ombudsman Service. No representation, warranty or undertaking is given as to the accuracy or completeness of the information on this website.

If you are not an institutional client or professional investor you should therefore not proceed. By proceeding please note that we will be treating you as a professional client for regulatory purposes and you agree to be bound by our terms and conditions.

If you do not accept these terms and conditions, as well as the terms of use of the website, please do not continue to use or access any pages on this website.

I Disagree