Managing the Family Firm: Evidence from CEOs at Work

Citation:

Oriana Bandiera, Renata Lemos, Andrea Prat, and Raffaella Sadun. 2018. “Managing the Family Firm: Evidence from CEOs at Work.” Review of Financial Studies, 31, Pp. 1605–1653. Publisher's Version
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Abstract:

We present evidence on the labor supply of CEOs, and on whether family and professional CEOs di↵er 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 di↵erences 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 di↵erences 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.
Last updated on 04/09/2021