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Coworker Complementarity and the Stability of Top-Management Teams

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  • Rachel M. Hayes
  • Paul Oyer
  • Scott Schaefer

Abstract

We analyze changes in the composition of top management teams when a key member of the team (the chief executive officer [CEO]) departs. We find that the probability of non-CEO top manager turnover increases markedly around times of CEO turnover. Further, the magnitude of this increase depends on the relations between the tenure of the manager and tenures of the departing and incoming CEOs. Departure of a long-tenured CEO has a larger effect on turnover probability for a long-tenured non-CEO manager than for a short-tenured manager. Succession of a long-tenured manager as CEO has a larger effect on turnover probability for a short-tenured non-CEO manager than for a long-tenured manager. We argue that these findings are at least partially the result of complementarities across these groups of coworkers that affect the value of employment relationships between senior executives and firms. Copyright 2006, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal The Journal of Law, Economics, and Organization.

Volume (Year): 22 (2006)
Issue (Month): 1 (April)
Pages: 184-212

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Handle: RePEc:oup:jleorg:v:22:y:2006:i:1:p:184-212

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Citations

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Cited by:
  1. Augustin Landier & David Sraer & David Thesmar, 2005. "Bottom-Up Corporate Governance," Working Papers 2005-30, Centre de Recherche en Economie et Statistique.
  2. Paul Oyer, 2006. "The Macro-Foundations of Microeconomics: Initial Labor Market Conditions and Long-Term Outcomes for Economists," NBER Working Papers 12157, National Bureau of Economic Research, Inc.
  3. Anthony M. Marino & Ján Zábojník, 2008. "Work-related perks, agency problems, and optimal incentive contracts," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 565-585.
  4. Paul Oyer & Scott Schaefer, 2012. "Firm/Employee Matching: An Industry Study of American Lawyers," NBER Working Papers 18620, National Bureau of Economic Research, Inc.
  5. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, December.
  6. Mas, Alexandre & Moretti, Enrico, 2006. "Peers at Work," CEPR Discussion Papers 5870, C.E.P.R. Discussion Papers.
  7. Stefan Hilger & Ansgar Richter & Utz Schaeffer, 2013. "Hanging Together, Together Hung? Career Implications of Interpersonal Ties Between CEOs and Top Managers," BuR - Business Research, German Academic Association for Business Research, vol. 6(1), pages 8-32, May.
  8. Paul Oyer & Scott Schaefer, 2010. "Personnel Economics: Hiring and Incentives," NBER Working Papers 15977, National Bureau of Economic Research, Inc.
  9. Robert S. Huckman & Jason Barro, 2005. "Cohort Turnover and Productivity: The July Phenomenon in Teaching Hospitals," NBER Working Papers 11182, National Bureau of Economic Research, Inc.
  10. Ann Bartel & Brianna Cardiff-Hicks & Kathryn Shaw, 2013. "Compensation Matters: Incentives for Multitasking in a Law Firm," NBER Working Papers 19412, National Bureau of Economic Research, Inc.
  11. Hadem, Michael, 2010. "Bedingungen und Konsequenzen des Wechsels von Finanzvorständen - Eine Analyse in großen börsennotierten Unternehmen," EconStor Theses, ZBW - German National Library of Economics, number 43681.

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