Working Paper: NBER ID: w19722
Authors: Oriana Bandiera; Renata Lemos; Andrea Prat; Raffaella Sadun
Abstract: 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.
Keywords: CEO labor supply; family firms; professional managers; firm performance
JEL Codes: M1; M12; M5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| CEO labor supply (J23) | firm performance (L25) |
| Family CEOs work fewer hours than professional CEOs (J29) | firm performance (L25) |
| Differences in CEO hours worked (M12) | performance gap between family and professional firms (L25) |