Working Paper: CEPR ID: DP13726
Authors: Katharina Janke; Carol Propper; Raffaella Sadun
Abstract: We investigate whether top managers affect the performance of large and complex public sector organizations, using as a case study CEOs of English public hospitals (large, complex organizations with multi-million turnover). We study the extent to which CEOs are differentiated in terms of their pay, as well as a wide range of hospital production measures including inputs, intermediate operational outcomes and clinical outcomes. Pay differentials suggest that the market perceives CEOs to be differentiated. However, we find little evidence of CEOs’ impact on hospital production. These results question the effectiveness of leadership changes to improve performance in the public sector.
Keywords: CEOs; Public Sector; NHS; Hospitals
JEL Codes: H51; I11; L32; M12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high-performing CEOs assigned to poorly performing hospitals (D29) | perceived effectiveness of leadership (M54) |
| short CEO tenures (M12) | realization of potential impacts on performance (D29) |
| match effects (C78) | CEO performance in specific hospital contexts (M12) |
| CEO effects (M12) | hospital production outcomes (D29) |
| CEO fixed effects (C23) | hospital-specific shocks (I19) |