CEO Backgrounds and Stock Performance: Evidence from the Great Recession
53 Pages Posted: 25 Jan 2018 Last revised: 23 Feb 2018
Date Written: January 18, 2016
Using the Great Recession of 2007-2009 as a quasi-natural experiment, we find that CEOs’ work experience is significantly related to firm stock performance while their endowed traits play a limited role in the recession. No CEO characteristics matter during the pre-recession period. CEOs who experienced more downturns in their incumbent firms’ industries during their careers perform better while CEOs with more diversified work experience perform worse in the recession; firm policies adopted by CEOs explain the former but not the latter finding, which appears to be more related to CEO incentives in the recession.
Keywords: CEO Characteristics, CEO Work Experience, Financial Crisis, Recession
JEL Classification: G30, J24, M10
Suggested Citation: Suggested Citation