We examine how CEOs’ impact on firm value varies over time. We document a hump-shaped relation between CEO tenure and firm value which is subject to meaningful variation depending on industry dynamics, the business cycle, and CEOs’ adaptability to changes. Semi-parametric estimations, stock returns to sudden deaths and to takeover announcements, as well as tests for extrapolation, survivorship, and endogenous CEO-firm matching and turnover confirm our results. They suggest that a considerable fraction of high-tenure CEOs is no longer the optimal match for their firms which seem to have difficulties, due to governance rather than labor market frictions, replacing incumbent CEOs.
Neues Working Paper: Limbach, Schmid, Scholz-Daneshgari (2016) - Do CEOs matter? Corporate Performance and the CEO Life Cycle
Autor: | Peter Limbach Markus Schmid Meik Scholz-Daneshgari |
Links: | Download Paper |
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Datum: | 07.10.2016 | ||