Managerial 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

See all articles by Rosemond Desir

Rosemond Desir

University of Massachusetts Amherst - Isenberg School of Management

Joseph Rakestraw

Florida Atlantic University - School of Accounting

Scott Seavey

Florida Atlantic University - School of Accounting

James Wainberg

Florida Atlantic University - School of Accounting

George Young

Florida Atlantic University - School of Accounting

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

Suggested Citation

Desir, Rosemond and Rakestraw, Joseph and Seavey, Scott and Wainberg, James and Young, George, Managerial Ability, CEO Age and the Moderating Effect of Firm Characteristics (January 2023). 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, Available at SSRN: https://ssrn.com/abstract=4336661 or http://dx.doi.org/10.2139/ssrn.4336661

Rosemond Desir (Contact Author)

University of Massachusetts Amherst - Isenberg School of Management ( email )

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Joseph Rakestraw

Florida Atlantic University - School of Accounting ( email )

777 Glades Blvd
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561-297-3008 (Phone)

Scott Seavey

Florida Atlantic University - School of Accounting ( email )

University Tower
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United States

James Wainberg

Florida Atlantic University - School of Accounting ( email )

University Tower
220 SE 2 Avenue
Boca Raton, FL 33431
United States

George Young

Florida Atlantic University - School of Accounting ( email )

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