Geography and the Market for CEOs

46 Pages Posted: 16 Jun 2010 Last revised: 4 Aug 2015

Scott E. Yonker

Cornell University - Dyson School of Applied Economics and Management

Date Written: July 31, 2015

Abstract

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 both labor supply and demand influence local matching. Compensation and unforced 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 suggest the presence of market segmentation and contrast with much of the prior literature which explicitly or implicitly assumes a single national market.

Keywords: CEO, geography, corporate finance

JEL Classification: G30, G34

Suggested Citation

Yonker, Scott E., Geography and the Market for CEOs (July 31, 2015). Available at SSRN: https://ssrn.com/abstract=1625470 or http://dx.doi.org/10.2139/ssrn.1625470

Scott E. Yonker (Contact Author)

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

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