Work

CEO Behavior and Firm Performance

Year: 2019

Type: article

Abstract: We develop a new method to measure CEO behavior in large samples via a survey that collects high-frequency, high-dimensional diary data and a machine learning algorithm that estimates behavioral types. Applying this method to 1,114 CEOs in six countries reveals two types: “leaders,” who do multifunction, high-level meetings, and “managers,” who do individual meetings with core functions. Firms that hire leaders perform better, and it takes three years for a new CEO to make a difference. Structural estimates indicate that productivity differentials are due to mismatches rather than to leaders being better for all firms.

Source: Journal of Political Economy

DOI: 10.1086/705331

Authors: Oriana Bandiera, Andrea Prat, Stephen Hansen, Raffaella Sadun

Institutions: London School of Economics and Political Science, Columbia University, Imperial College London, Harvard University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

Funder: University of Chicago

OpenAlex ID: W2601808389