Communication within Firms: Evidence from CEO Turnovers

By: Stephen Michael Impink, Andrea Prat and Raffaella Sadun

Format:Print
| Language:English

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.

Keywords

CEO Turnover; Management Succession; Organizations; Communication

Citation

Impink, Stephen Michael, Andrea Prat, and Raffaella Sadun. "Communication within Firms: Evidence from CEO Turnovers." NBER Working Paper Series, No. 29042, July 2021.

About The Author

Raffaella Sadun

Strategy

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