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How much is CEO education worth to a firm? Evidence from European firms

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  • Ottorino Morresi

    (Roma Tre University)

Abstract

The emergence of an industry dedicated to evaluating the quality of university institutions around the world makes it possible to analyze whether students who graduate from highly-ranked schools perform better during their working lives. We focus on the education of CEOs who lead European listed firms, and analyze its impact on firm performance. If better schools produced better managers, we should find better firm performance for the firms led by managers who have graduated from highly-ranked schools. However, we do not find clear support for this claims, and rather our analysis shows that the ranking position of a university is not significantly linked to firm performance. Moreover, we find that the results of any such estimate are highly sensitive to the performance measure used and the type of ranking chosen. "QS University Rankings" and "Times Higher Education University Rankings" produce results that are more in line with our assumption. Unlike accounting ratios, market-based performance measures tend to provide stronger support for our hypothesis.

Suggested Citation

  • Ottorino Morresi, 2017. "How much is CEO education worth to a firm? Evidence from European firms," PSL Quarterly Review, Economia civile, vol. 70(282), pages 311-353.
    • Handle: RePEc:psl:pslqrr:2017:34
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/14008/13763
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    Cited by:

    1. Carlo D'Ippoliti, 2021. "“Many‐Citedness”: Citations Measure More Than Just Scientific Quality," Journal of Economic Surveys, Wiley Blackwell, vol. 35(5), pages 1271-1301, December.
    2. Gaurav Gupta & Jitendra Mahakud & Vivek Verma, 2020. "CEO's education and investment–cash flow sensitivity: an empirical investigation," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 17(4), pages 589-618, December.
    3. Pan, Xiaozhen & Tang, Hongfei, 2021. "Are both managerial morality and talent important to firm performance? Evidence from Chinese public firms," International Review of Financial Analysis, Elsevier, vol. 73(C).
    4. Ya You & Shuba Srinivasan & Koen Pauwels & Amit Joshi, 2020. "How CEO/CMO characteristics affect innovation and stock returns: findings and future directions," Journal of the Academy of Marketing Science, Springer, vol. 48(6), pages 1229-1253, November.
    5. Zagudalova, E. & Grigorieva, S. & Zueva, S., 2024. "Does the education and experience of CEO matter? Evidence from M and As initiated by the Russian companies," Journal of the New Economic Association, New Economic Association, vol. 64(3), pages 103-127.
    6. Gaurav Gupta, 2022. "CEO's age and investment‐cash flow sensitivity," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2212-2224, September.
    7. Weifeng Xu & Qingsong Ruan & Chang Liu, 2019. "Can the Famous University Experience of Top Managers Improve Corporate Performance? Evidence from China," Sustainability, MDPI, vol. 11(24), pages 1-20, December.
    8. Ignazio Visco, 2020. "Economic growth and productivity: Italy and the role of knowledge," PSL Quarterly Review, Economia civile, vol. 73(294), pages 205-224.
    9. Tutun Mukherjee & Som Sankar Sen, 2022. "Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-50, December.

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    More about this item

    Keywords

    Human capital; Resource-based view; Upper echelon theory; Market-based performance; Accounting-based performance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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