Corporate Transformational Leadership's Effect on Financial Performance

Abstract

Transformational leadership (TL) has been described as a preferred leadership style, however, its frequently used measurement tool has been often criticized. Furthermore, only few empirical studies have examined the relationship between TL and organization’s financial performance. Using a unique approach of text mining to measure and identify TL, this is the first study to show a statistical significant relationship between TL and stock price, while providing evidence that TL may change over time and be manifested with a different rate.