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Geography and the Market for CEOs

Scott E. Yonker

Indiana University - Kelley School of Business - Department of Finance; Cornell University

November 11, 2014

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. This local matching bias is widespread and exists even among the largest U.S. firms. Tests reveal that local geographic preferences of CEOs are likely influencing the matching outcomes. Compensation and turnover are lower for local than for non-local CEOs, and unlike non-local CEOs, the compensation of locals depends on local labor market factors. These findings change the prior in the finance literature that CEO labor markets for large U.S. corporations are national markets.

Number of Pages in PDF File: 53

Keywords: CEO, geography, corporate finance

JEL Classification: G30, G34

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Date posted: June 16, 2010 ; Last revised: November 15, 2014

Suggested Citation

Yonker, Scott E., Geography and the Market for CEOs (November 11, 2014). Available at SSRN: http://ssrn.com/abstract=1625470 or http://dx.doi.org/10.2139/ssrn.1625470

Contact Information

Scott E. Yonker (Contact Author)
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States

Cornell University ( email )
Ithaca, NY 14853
United States

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