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Managing the Family Firm: Evidence from CEOs at Work

52 Pages Posted: 6 Dec 2013 Last revised: 6 Jul 2017

Oriana Bandiera

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Andrea Prat

Centre for Economic Policy Research (CEPR); Columbia Business School - Finance and Economics

Renata Lemos

London School of Economics & Political Science (LSE)

Raffaella Sadun

Harvard University - Strategy Unit; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

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Date Written: June 14, 2017

Abstract

We present evidence on the labor supply of CEOs, and on whether family and professional CEOs differ on this dimension. We do so through a new survey instrument that allows us to codify CEOs’ diaries in a detailed and comparable fashion, and to build a bottom-up measure of CEO labor supply. The comparison of 1,114 family and professional CEOs reveals that family CEOs work 9% fewer hours relative to professional CEOs. Hours worked are positively correlated with firm performance, and differences between family and non-family CEOs account for approximately 18% of the performance gap between family and non-family firms. We investigate the sources of the differences in CEO labor supply across governance types by exploiting firm and industry heterogeneity, and quasi-exogenous meteorological and sport events. The evidence suggests that family CEOs value–or can pursue–leisure activities relatively more than professional CEOs.

Suggested Citation

Bandiera, Oriana and Prat, Andrea and Lemos, Renata and Sadun, Raffaella, Managing the Family Firm: Evidence from CEOs at Work (June 14, 2017). Harvard Business School Strategy Unit Working Paper No. 14-044. Available at SSRN: https://ssrn.com/abstract=2363528 or http://dx.doi.org/10.2139/ssrn.2363528

Oriana Bandiera

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7519 (Phone)
+44 20 7055 6951 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

IZA Institute of Labor Economics

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

Andrea Prat

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Renata Lemos

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Raffaella Sadun (Contact Author)

Harvard University - Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, 02163
United States

HOME PAGE: http://people.hbs.edu/rsadun

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

HOME PAGE: http://cep.lse.ac.uk/_new/staff/person.asp?id=1758

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