Does the Market Value CEO Styles?

Antoinette Schoar and Luo Zuo

American Economic Review, 2016, vol. 106, issue 5, 262-66

Abstract: We study how investors perceive the skill set that different types of CEOs bring into their companies. We compare CEOs who started their careers during a recession with other CEOs. We show that the announcement return around the appointment of a recession CEO is very significant and positive, and this positive market reaction is driven by cases where a recession CEO replaces a non-recession CEO. Our results indicate that the market assigns a positive and economically meaningful value to a recession CEO, suggesting that there is a limited supply of these types of CEOs in the executive labor market.

JEL-codes: E32 G14 G32 G34 M12 M52 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/aer.p20161031
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Citations: View citations in EconPapers (21)

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