Journal of Corporate Finance Vol. 78 2023
Employee approval of CEOs and firm value: Evidence from Employees' choice awards
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).
- DOI
- 10.1016/j.jcorpfin.2022.102341
- Volume
- 78
- Pages
- 102341
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref