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.

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8 September 2021     Paper Number CEPDP1796

Download PDF - Communication within firms: evidence from CEO turnovers

This CEP discussion paper is published under the centre's Growth programme.