CEO Behavior and Firm Performance

Oriana Bandiera, Andrea Prat, Stephen Hansen and Raffaella Sadun

Journal of Political Economy, 2020, vol. 128, issue 4, 1325 - 1369

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.

Date: 2020
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Working Paper: CEO behavior and firm performance (2020)
Working Paper: CEO Behavior and Firm Performance (2017)
Working Paper: CEO Behavior and Firm Performance (2017)
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