Publications
Publications
- 2022
Communication within Firms: Evidence from CEO Turnovers
By: Stephen Michael Impink, Andrea Prat and Raffaella Sadun
Abstract
This paper uses novel, firm-level communication measures derived from communications
metadata several months before and after a CEO transition for 102 firms to study whether and
how this organizational event is reflected in employees’ communication flows. We find that CEO
turnover is associated with an initial decrease in intra-firm communication (-10% relative to the
pre-CEO transition period), followed by a significant increase approximately five months after
the CEO turnover (+33%). The increase in communications is driven primarily by interdepartmental (i.e. communication involving employees of different functional departments) and vertical (i.e. communication among managers and employees) communication flows. Firms
where the medium-run increase in communication is higher experience greater increases in
market returns and revenues in the year following the CEO transition.
Keywords
Citation
Impink, Stephen Michael, Andrea Prat, and Raffaella Sadun. "Communication within Firms: Evidence from CEO Turnovers." NBER Working Paper Series, No. 29042, July 2021. (Revised September 2022.)