Publications
Publications
- April 2020
- Journal of Political Economy
CEO Behavior and Firm Performance
By: Oriana Bandiera, Stephen Hansen, Andrea Prat and Raffaella Sadun
Abstract
We measure the behavior of 1,114 CEOs in six countries parsing granular CEO diary data through an unsupervised machine learning algorithm. The algorithm uncovers two distinct behavioral types: "leaders" and "managers." Leaders focus on multi-function, high-level meetings, while managers focus on one-to-one meetings with core functions. Firms with leader CEOs are on average more productive, and this difference arises only after the CEO is hired. The data is consistent with horizontal differentiation of CEO behavioral types and firm-CEO matching frictions. We estimate that 17% of sample CEOs are mismatched and that mismatches are associated with significant productivity losses.
Keywords
Citation
Bandiera, Oriana, Stephen Hansen, Andrea Prat, and Raffaella Sadun. "CEO Behavior and Firm Performance." Journal of Political Economy 128, no. 4 (April 2020): 1325–1369.