Firms use positive financial news and press releases as a 'shield' to prevent their employees from being poached by larger competitors.
April 1, 2026
Original Paper
When a Large Employer Comes to Town: Labor Market Entry and Corporate Disclosure
SSRN · 6395939
The Takeaway
While corporate disclosures are usually intended for investors, this study shows that when a major employer like Amazon moves into a county, local firms start releasing significantly more optimistic, forward-looking reports. This isn't for the stock market; it is a strategic HR tactic to manipulate workers' perceptions of the company's future and reduce turnover.
From the abstract
This paper examines how incumbent firms adjust their disclosure behavior in response to heightened labor market competition. Using announcements of large employer entries into local labor markets, I find that incumbent firms located in the affected counties increase the disclosure of positive, forward-looking information. This response is concentrated among incumbent firms that compete more directly with entrant firms for similar workers and is strongest in local labor markets where employee ret