Abstract

http://ssrn.com/abstract=1293659
 
 

References (28)



 
 

Citations (49)



 


 



Do Ceos Matter?


Morten Bennedsen


INSEAD - Economics and Political Sciences

Francisco Perez-Gonzalez


Stanford University; National Bureau of Economic Research (NBER)

Daniel Wolfenzon


Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

October 2006

NYU Working Paper No. FIN-06-032

Abstract:     
Estimating the value of top managerial talent is a central topic of research that hasattracted widespread attention from academics and practitioners. Yet, studying the impact of managers on firm performance is difficult because of endogeneity and omitted variablesconcerns. We test for the impact of managers on firm performance in two ways. First, weexamine whether top management (chief executive officers and board members) deaths have an impact on firm performance, focusing on the manager and firm characteristics that are associated to large manager-death effects. To our knowledge, this is the first test that assesses the consequences of managerial deaths on firm operating performance, investment rates and salesgrowth. Second, to bolster the interpretation that these effects are driven by managers, we test whether the death of top management immediate family members (spouse, parents, children,etc) affect firm prospects. These events provide us with exogenous variation in the attention managers pay to their business and thus allow us to measure the impact of managerial contribution to firm prospects. Our main findings are three. First, CEO deaths are strongly correlated with declines in firm operating profitability, asset growth and sales growth. Second,the death of board members does not seem to affect firm prospects, indicating that not all seniormanagers are equally important for firms outcomes. Third, CEOs immediate family deaths are significantly negatively correlated to firm performance. This last result establishes a strong link between the personal and business roles that top management play. Overall, our findingsdemonstrate CEOs are extremely important for firms prospects.

Number of Pages in PDF File: 35

working papers series


Download This Paper

Date posted: November 3, 2008  

Suggested Citation

Bennedsen, Morten and Perez-Gonzalez, Francisco and Wolfenzon, Daniel, Do Ceos Matter? (October 2006). NYU Working Paper No. FIN-06-032. Available at SSRN: http://ssrn.com/abstract=1293659

Contact Information

Morten Bennedsen (Contact Author)
INSEAD - Economics and Political Sciences ( email )
Boulevard de Constance
F-77305 Fontainebleau Cedex
France

INSEAD Logo

Francisco Perez-Gonzalez
Stanford University ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Daniel Wolfenzon
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 3,652
Downloads: 742
Download Rank: 17,695
References:  28
Citations:  49

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.375 seconds