Why Do Leaders Matter? The Role of Expert Knowledge
Amanda H. Goodall
IZA Institute for the Study of Labor
Lawrence M. Kahn
Cornell University - School of Industrial and Labor Relations; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)
Andrew J. Oswald
University of Warwick - Department of Economics; Institute for the Study of Labor (IZA)
IZA Discussion Paper No. 3583
Why do some leaders succeed while others fail? This question is important, but its complexity makes it hard to study systematically. We examine an industry in which there are well-defined objectives, small teams, and exact measures of leaders' characteristics. We show that a strong predictor of a leader's success in year T is that person's own level of attainment, in the underlying activity, in approximately year T-20. Our data come from 15,000 professional basketball games. The effect on team performance of the coach's 'expert knowledge' is large and is discernible in the data within 12 months of his being hired.
Number of Pages in PDF File: 39
Keywords: organizational performance, firms, leadership, fixed-effects, productivity
JEL Classification: J24, M51working papers series
Date posted: July 14, 2008
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