Competence enhancement from interactive learning: Does attending conferences affect CEO turnover?

Abstract

Managers can benefit from learning about stock prices and voluntary disclosure feedback to solidify their position. However, the value of managerial interactive learning is often overlooked. This paper examines the impact of CEO conference interactions on forced turnover. In specifications that include CEO fixed effects to absorb certain personality traits or work abilities, we find that directly interactive CEOs have a lower probability of turnover and weaken turnover-performance link. CEOs with interactive learning can change post-turnover profitability and curb declining performance. This entrenched CEO job after conference interactions is equally strong for first-time visitors, after excluding debriefings from other executives, where external pressures are higher, and it is much weaker for non-CEO executives, consistent with a role for CEOs' competence improvement from interactive learning. Positive and negative information content can be captured during meetings as reflected by the CEO's emotional tone and response to rumors. Our findings differ from earlier studies because of our emphasis on within-group estimation, and we focus on the impact of CEOs' interactive learning to acquire abilities rather than personality traits or job competence.