Download This PaperManagerial Ability, CEO Age and the Moderating Effect of Firm Characteristics
Desir, R., Rakestraw, J., Seavey, S., Wainberg, J., & Young, G. (2023). Managerial ability, CEO age and the moderating effect of firm characteristics. Journal of Business Finance & Accounting, 00, 00– 00. https://doi.org/10.1111/jbfa.12689
60 Pages Posted: 26 Jan 2023
Date Written: January 2023
Abstract
Recent surveys indicate that America's Chief Executive Officers (CEOs) are getting older. While ageing is often associated with greater experience, improved skillsets, and higher job performance, prior research warns that ageing can also lead to a significant decrease in cognitive function, energy, ambition, and consequently, the ability of CEOs to manage their firms. We examine this issue and find that older CEOs display significantly lower managerial ability as compared to younger CEOs. Exploring differences in firm factors, we further find that older CEOs exhibit significantly lower managerial ability when managing high-technology firms and significantly higher managerial ability when managing more mature, highly regulated firms. Collectively, our study provides new evidence that, while managerial ability decreases with age, firm characteristics significantly moderate this relationship.
Keywords: Chief Executive Officer (CEO), Age, Managerial Ability, Mandatory Retirement, Firm Characteristics
JEL Classification: G30, M12, M40
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