TY - JOUR

T1 - Do CEOs Matter? Evidence from Hospitalization Events

AU - Bennedsen, Morten

AU - Pérez-González, Francisco

AU - Wolfenzon, Daniel

PY - 2020/8/1

Y1 - 2020/8/1

N2 - Using variation in firms’ exposure to their CEOs resulting from hospitalization, we estimate the effect of chief executive officers (CEOs) on firm policies, holding firm-CEO matches constant. We document three main findings. First, CEOs have a significant effect on profitability and investment. Second, CEO effects are larger for younger CEOs, in growing and family-controlled firms, and in human-capital-intensive industries. Third, CEOs are unique: the hospitalization of other senior executives does not have similar effects on the performance. Overall, our findings demonstrate that CEOs are a key driver of firm performance, which suggests that CEO contingency plans are valuable.

AB - Using variation in firms’ exposure to their CEOs resulting from hospitalization, we estimate the effect of chief executive officers (CEOs) on firm policies, holding firm-CEO matches constant. We document three main findings. First, CEOs have a significant effect on profitability and investment. Second, CEO effects are larger for younger CEOs, in growing and family-controlled firms, and in human-capital-intensive industries. Third, CEOs are unique: the hospitalization of other senior executives does not have similar effects on the performance. Overall, our findings demonstrate that CEOs are a key driver of firm performance, which suggests that CEO contingency plans are valuable.

U2 - 10.1111/jofi.12897

DO - 10.1111/jofi.12897

M3 - Journal article

AN - SCOPUS:85081982241

VL - 75

SP - 1877

EP - 1911

JO - The Journal of Finance

JF - The Journal of Finance

SN - 0022-1082

IS - 4

ER -