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Communication within firms: evidence from CEO turnovers

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  • Stephen Michael Impink
  • Andrea Prat
  • Raffaella Sadun

Abstract

This paper uses novel, firm-level measures derived from communications metadata before and after a CEO transition in 102 firms to study if CEO turnover impacts employees' communication flows. We find that CEO turnover leads to an initial decrease in intra-firm communication, followed by a significant increase approximately five months after the CEO change. The increase is driven primarily by vertical (i.e. manager to employee) communication. Greater increases in communication after CEO change are associated with greater increases in firm market returns.

Suggested Citation

  • Stephen Michael Impink & Andrea Prat & Raffaella Sadun, 2021. "Communication within firms: evidence from CEO turnovers," CEP Discussion Papers dp1796, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1796
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    Cited by:

    1. Diego Battiston & Jordi Blanes i Vidal & Tom Kirchmaier & Katalin Szemeredi, 2023. "Peer pressure and manager pressure in organisations," CEP Discussion Papers dp1924, Centre for Economic Performance, LSE.
    2. Battiston, Diego Ezequiel & Blanes I Vidal, Jordi & Kirchmaier, Tom & Szemeredi, Katalin, 2023. "Peer pressure and manager pressure in organisations," LSE Research Online Documents on Economics 121319, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    CEO change; communication; alignment;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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