Competing with Superstars

Manuel Ammann, Philipp Horsch and David Oesch ()

No 1510, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: This paper investigates the effect of superstar CEOs on their competitors. Exploiting shocks to CEO status due to prestigious media awards, we document a significant positive stock market performance of competitors of superstar CEOs subsequent to the award. The effect is more pronounced for competitors who have not received an award themselves, who are geographically close to an award winner and who are not entrenched. We observe an increase in risk-taking, operating performance and innovation activity of superstars’ competitors as potential channels for this positive performance. Our results suggest a positive overall welfare impact of corporate superstar systems due to the incentivizing effect on superstars’ competitors.

Keywords: Competition; Firm performance; Risk-taking; Innovation; Awards; CEO (search for similar items in EconPapers)
JEL-codes: G30 G31 G32 G34 J31 J33 L25 (search for similar items in EconPapers)
Pages: 70 pages
Date: 2015-05, Revised 2016-01
New Economics Papers: this item is included in nep-cfn, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Journal Article: Competing with Superstars (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:usg:sfwpfi:2015:10

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