Geography and the Market for CEOs
Scott E. Yonker
Indiana University Bloomington - Department of Finance
October 16, 2012
I examine the role of geography in the market for CEOs and find that firms hire locally five times more often than expected if geography were irrelevant to the matching process. Geography affects both labor supply and demand. Firms located in less desirable locations that are less R&D-intensive are more likely to hire local CEOs. Compensation and turnover are lower for local CEOs than for non-locals and unlike non-local CEOs, the compensation of locals depends on local labor market factors. These results are consistent with CEOs optimally matching to firms, whereby the geographic preferences of CEOs influence the matching outcomes.
Number of Pages in PDF File: 51
Keywords: CEO, geography, corporate finance
JEL Classification: G30, G34working papers series
Date posted: June 16, 2010 ; Last revised: October 17, 2012
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