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CEO behavior and firm performance

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Listed:
  • Bandiera, Oriana
  • Prat, Andrea
  • Hansen, Stephen
  • Sadun, Raffaella

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.

Suggested Citation

  • Bandiera, Oriana & Prat, Andrea & Hansen, Stephen & Sadun, Raffaella, 2020. "CEO behavior and firm performance," LSE Research Online Documents on Economics 101423, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:101423
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    References listed on IDEAS

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    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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