Why Do Leaders Matter? The Role of Expert Knowledge

39 Pages Posted: 14 Jul 2008

See all articles by Amanda H. Goodall

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); IZA Institute of Labor Economics

Andrew J. Oswald

University of Warwick - Department of Economics; IZA Institute of Labor Economics

Abstract

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.

Keywords: organizational performance, firms, leadership, fixed-effects, productivity

JEL Classification: J24, M51

Suggested Citation

Goodall, Amanda H. and Kahn, Lawrence M. and Oswald, Andrew J., Why Do Leaders Matter? The Role of Expert Knowledge. IZA Discussion Paper No. 3583. Available at SSRN: https://ssrn.com/abstract=1158980 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Amanda H. Goodall (Contact Author)

IZA Institute for the Study of Labor ( email )

Schaumburg-Lippe-Str. 5-9
Bonn, 53113
Germany

Lawrence M. Kahn

Cornell University - School of Industrial and Labor Relations ( email )

265 Ives Hall
Ithaca, NY 14853-3901
United States
607-255-0510 (Phone)
607-255-4496 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Andrew J. Oswald

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
523510 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
234
Abstract Views
1,466
rank
129,005
PlumX Metrics