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  • 2022
  • Working Paper
  • HBS Working Paper Series

Passing the Mic: Career and Firm Outcomes of Executive Interactions

By: Wei Cai, Ethan Rouen and Yuan Zou
  • Format:Print
  • | Language:English
  • | Pages:57
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Abstract

We exploit a unique feature of conference calls to study one type of interaction among executives—directly inviting colleagues to respond to analysts’ questions. We find that the frequency of initiating interaction is positively associated with an executive’s ability, but not associated with firm performance. When new CEOs initiate more interactions than their predecessors, interaction among the rest of the executive team also increases, suggesting a learning effect. Turning to the outcomes of this practice, we find that executives who initiate more interactions than their peers are twice as likely as the average executive to be promoted to CEO. What is more, appointing CEOs who initiate more interactions than their predecessors results in an average three-day abnormal return of 0.9% around the announcement of the appointment. Teams composed of executives who interact with each other more frequently also have greater retention. Lastly, firms in which new CEOs initiate more interactions than their predecessors experience higher growth in Tobin’s Q, a result that is concentrated among growth and R&D-intensive firms.

Keywords

Conference Calls; CEO Succession; Executive Interactions; Promotion; Interpersonal Communication; Personal Development and Career; Retention

Citation

Cai, Wei, Ethan Rouen, and Yuan Zou. "Passing the Mic: Career and Firm Outcomes of Executive Interactions." Harvard Business School Working Paper, No. 22-069, May 2022.
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About The Authors

Ethan C. Rouen

Accounting and Management
→More Publications

Yuan Zou

Accounting and Management
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  • Haidilao: Changing Your Future with Your Own Hands By: Yuan Zou and Dennis Campbell
  • Brown and Coconut Spreadsheet Class Solution By: Yuan Zou
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