Remotely Productive: The Economics of Long-Distance CEOs

53 Pages Posted: 25 Jan 2021

See all articles by Ran Duchin

Ran Duchin

Boston College - Carroll School of Management

Denis Sosyura

Arizona State University

Date Written: January 7, 2021

Abstract

We provide the first evidence on the efficacy of long-distance working arrangements between CEOs and firms. Long-distance CEOs underperform according to operating performance, insider reviews, and announcement returns to CEO departures. These effects are stronger when the CEO’s commute is longer and crosses multiple time zones. Using the quality of schools available to the CEO’s children as an instrument for the decision to commute, we argue that these effects are causal. CEOs’ private costs of working remotely have long-run effects on their strategic decisions and on the future of their firms. Remote CEOs are 60% more likely to sell their firm to an acquirer, and they do so at bargain prices.

JEL Classification: G30, G34, G41

Suggested Citation

Duchin, Ran and Sosyura, Denis, Remotely Productive: The Economics of Long-Distance CEOs (January 7, 2021). Available at SSRN: https://ssrn.com/abstract=3761972 or http://dx.doi.org/10.2139/ssrn.3761972

Ran Duchin (Contact Author)

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

Denis Sosyura

Arizona State University ( email )

Tempe, AZ 85287-3706
United States

HOME PAGE: http://www.public.asu.edu/~dsosyura/

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