Communication within Firms: Evidence from CEO Turnovers

Stephen Michael Impink, Andrea Prat and Raffaella Sadun

No 29042, NBER Working Papers from National Bureau of Economic Research, Inc

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 inter-departmental (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.

JEL-codes: L2 M12 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-bec, nep-hrm and nep-isf
Note: PR
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Communication Within Firms: Evidence from CEO Turnovers (2025)
Working Paper: Communication within firms: evidence from CEO turnovers (2021)
Working Paper: Communication within firms: evidence from CEO turnovers (2021)
Working Paper: Communication within firms: evidence from CEO turnovers (2021)
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