Does CEO Fitness Matter?

Peter Limbach

Karlsruhe Institute of Technology

Florian Sonnenburg

University of Cologne - Centre for Financial Research (CFR)

November 17, 2015

This study provides evidence suggesting that CEOs’ physical fitness has a positive impact on firm value, consistent with the beneficial effects of fitness on, e.g., cognitive functions, stress coping and job performance. For each of the years 2001 to 2011, we define S&P 1500 CEOs as fit if they finish a marathon. CEO fitness is also associated with higher firm profitability and higher M&A announcement returns. Our identification strategy includes CEO-firm fixed effects, instrumental variables, permutation tests, random effects, and time-varying CEO, firm and industry effects. An additional analysis of sudden CEO deaths, based on a fitness measure not limited to running, confirms our results.

Number of Pages in PDF File: 46

Keywords: CEO heterogeneity, firm value, mergers and acquisitions, physical fitness

JEL Classification: G32, G34, J24

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Date posted: September 3, 2014 ; Last revised: November 18, 2015

Suggested Citation

Limbach, Peter and Sonnenburg, Florian, Does CEO Fitness Matter? (November 17, 2015). Available at SSRN: https://ssrn.com/abstract=2489967 or http://dx.doi.org/10.2139/ssrn.2489967

Contact Information

Peter Limbach (Contact Author)
Karlsruhe Institute of Technology ( email )
Kaiserstraße 12
Karlsruhe, Baden Württemberg 76131
Florian Sonnenburg
University of Cologne - Centre for Financial Research (CFR) ( email )
Albertus-Magnus Platz
Cologne, 50923
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