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Co-worker Complementarity and the Stability of Top Management Teams

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  • Hayes, Rachel M.

    (U of Chicago)

  • Oyer, Paul

    (Stanford U)

  • Schaefer, Scott

    (Northwestern U)

Abstract

We analyze changes in the composition of top management teams when a key member of the team (the 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 increases the marginal effect of manager tenure on the CEO/manager turnover association. Succession of a long-tenured CEO decreases the marginal effect of manager tenure on the CEO/manager turnover association. We argue that these findings are at least partially the result of complementarities across these groups of co-workers that affect the value of employment relationships between senior executives and firms.

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Bibliographic Info

Paper provided by Stanford University, Graduate School of Business in its series Research Papers with number 1846r.

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Date of creation: Jan 2005
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Handle: RePEc:ecl:stabus:1846r

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Citations

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Cited by:
  1. 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.
  2. Mas, Alexandre & Moretti, Enrico, 2006. "Peers at Work," IZA Discussion Papers 2292, Institute for the Study of Labor (IZA).
  3. Augustin Landier & Julien Sauvagnat & David Sraer & David Thesmar, 2013. "Bottom-Up Corporate Governance," Review of Finance, European Finance Association, vol. 17(1), pages 161-201.
  4. Paul Oyer & Scott Schaefer, 2010. "Personnel Economics: Hiring and Incentives," NBER Working Papers 15977, National Bureau of Economic Research, Inc.
  5. 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.
  6. Paul Oyer & Scott Schaefer, 2012. "Firm/Employee Matching: An Industry Study of American Lawyers," NBER Working Papers 18620, National Bureau of Economic Research, Inc.
  7. 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.
  8. 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.
  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. Edward P. Lazear & Paul Oyer, 2007. "Personnel Economics," NBER Working Papers 13480, National Bureau of Economic Research, Inc.
  11. 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.

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