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Heavy is the Crown: CEOs' Social Interactions and Layoff Decisions

Author

Listed:
  • Andrea Bassanini

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Eve Caroli

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Kevin Geay

    (IRISSO - Institut de Recherche Interdisciplinaire en Sciences Sociales - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Antoine Rebérioux

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, LADYSS - Laboratoire Dynamiques Sociales et Recomposition des Espaces - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité)

Abstract

We develop a theory of non-monetary costs incurred by CEOs when deciding about layoffs and test its predictions on French data. Our results support the idea that, being strongly embedded in their social environment, CEOs find it more difficult to fire employees closer to their own workplace. This effect is stronger whenever social interactions are less anonymous in the CEOs' local environment. It is weaker when CEOs live further away from where they work, because of limited exposure to local discontent.

Suggested Citation

  • Andrea Bassanini & Eve Caroli & Kevin Geay & Antoine Rebérioux, 2023. "Heavy is the Crown: CEOs' Social Interactions and Layoff Decisions," PSE Working Papers hal-04118212, HAL.
    • Handle: RePEc:hal:psewpa:hal-04118212
    Note: View the original document on HAL open archive server: https://hal.science/hal-04118212
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    More about this item

    Keywords

    Layoffs; Non-monetary costs; CEO; Social embeddedness; DT LEDa-LEGOS;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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