Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148427
Authors: 
Limbach, Peter
Schmid, Markus M.
Scholz-Daneshgari, Meik
Year of Publication: 
2016
Series/Report no.: 
CFR Working Paper 16-11
Abstract: 
We examine how CEOs' impact on firm value varies over time. We document a hump-shaped relation between CEO tenure and firm value which is subject to meaningful variation depending on industry dynamics, the business cycle, and CEOs' adaptability to changes. Semi-parametric estimations, stock returns to sudden deaths and to takeover announcements, as well as tests for extrapolation, survivor-ship, and endogenous CEO-firm matching and turnover confirm our results. They suggest that a considerable fraction of high-tenure CEOs is no longer the optimal match for their firms which seem to have difficulties, due to governance rather than labor market frictions, replacing incumbent CEOs.
Subjects: 
CEO adaptability
(within-)CEO heterogeneity
CEO tenure
CEO term limits
environmental dynamics
firm value
investments
JEL: 
G30
G34
J24
Document Type: 
Working Paper

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