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Managing the Family Firm: Evidence from CEOs at Work

Oriana Bandiera1; Renata Lemos2; Andrea Prat3; Raffaella Sadun4

1 London School of Economics · 2 World Bank · 3 Columbia University · 4 Harvard University

Review of Financial Studies 2018 open access

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. Layperson summary

DOI
10.1093/rfs/hhx138
Volume
31 (5)
Pages
1605-1653
Language
en
Export
BibTeX
Sources
crossref openalex