Employee approval of CEOs and firm value: Evidence from Employees' choice awards

Spencer Barnes and Yingmei Cheng

Journal of Corporate Finance, 2023, vol. 78, issue C

Abstract: Using Glassdoor's list of “Top CEOs by Employees' Choice,” we adopt a regression discontinuity (RD) specification to establish a causal link between the employee approval of CEOs and firm value. Having a CEO included in the top list results in an increase in firm performance in both stock returns and return on assets. Having a top CEO significantly increases a firm's employee efficiency, attraction to future employees, hiring of high-quality laborers such as inventors, and attraction to the customers. Our findings establish that the CEO-employee relationship is an important, though intangible, component of a corporation, and we emphasize the critical role of perceived corporate culture in the spirit of Guiso et al. (2015).

Keywords: CEO-employee relationship; Top CEO award; Corporate culture; Regression discontinuity (search for similar items in EconPapers)
JEL-codes: G30 G34 M14 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:78:y:2023:i:c:s0929119922001845

DOI: 10.1016/j.jcorpfin.2022.102341

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