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  • May 2018
  • Article
  • Review of Financial Studies

Managing the Family Firm: Evidence from CEOs at Work

By: Oriana Bandiera, Renata Lemos, Andrea Prat and Raffaella Sadun
  • Format:Print
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Abstract

We present evidence on the labor supply of CEOs and on whether family and professional CEOs differ on this dimension. We do so through a new survey instrument that allows us to codify CEOs’ diaries in a detailed and comparable fashion and to build a bottom-up measure of CEO labor supply. The comparison of 1,114 family and professional CEOs reveals that family CEOs work 9% fewer hours relative to professional CEOs. Hours worked are positively correlated with firm performance, and differences between family and non-family CEOs account for approximately 18% of the performance gap between family and non-family firms. We investigate the sources of the differences in CEO labor supply across governance types by exploiting firm and industry heterogeneity and quasi-exogenous meteorological and sport events. The evidence suggests that family CEOs value—or can pursue—leisure activities relatively more than professional CEOs.

Keywords

Performance Productivity; Family Ownership; Management

Citation

Bandiera, Oriana, Renata Lemos, Andrea Prat, and Raffaella Sadun. "Managing the Family Firm: Evidence from CEOs at Work." Review of Financial Studies 31, no. 5 (May 2018): 1605–1653. (Lead article.)
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About The Author

Raffaella Sadun

Strategy
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  • Reskilling in the Age of AI By: Jorge Tamayo, Leila Doumi, Sagar Goel, Orsolya Kovács-Ondrejkovic and Raffaella Sadun
  • Ferrari: Shifting to Carbon Neutrality By: Raffaella Sadun, Elena Corsi and Leila Doumi
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