Does the Market Value CEO Styles?

8 Pages Posted: 17 May 2016  

Antoinette Schoar

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Luo Zuo

Cornell University - Samuel Curtis Johnson Graduate School of Management

Date Written: May 12, 2016

Abstract

We study how investors perceive the skill set that different types of CEOs bring into their companies. We compare CEOs who started their careers during a recession with other CEOs. We show that the announcement return around the appointment of a recession CEO is very significant and positive, and this positive market reaction is driven by cases where a recession CEO replaces a non-recession CEO. Our results indicate that the market assigns a positive and economically meaningful value to a recession CEO, suggesting that there is a limited supply of these types of CEOs in the executive labor market.

Keywords: CEO Turnover, Announcement Return, Management Style, Recession, Executive Labor Market

JEL Classification: G30, J24, J44, M51

Suggested Citation

Schoar, Antoinette and Zuo, Luo, Does the Market Value CEO Styles? (May 12, 2016). American Economic Review, Vol. 106, No. 5, 2016. Available at SSRN: https://ssrn.com/abstract=2780040

Antoinette Schoar (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

50 Memorial Drive, E52-447
Cambridge, MA 02142
United States
617-253-3763 (Phone)
617-258-6855 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Luo Zuo

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

349 Sage Hall
Ithaca, NY 14853
United States
607-255-4002 (Phone)

HOME PAGE: http://www.johnson.cornell.edu/Faculty-And-Research/Profile/id/lz352

Register to save articles to
your library

Register

Paper statistics

Downloads
368
rank
72,514
Abstract Views
1,282
PlumX