Shaped by Booms and Busts: How the Economy Impacts CEO Careers and Management Styles

Antoinette Schoar, Luo Zuo

NBER Working Paper No. 17590
Issued in November 2011
NBER Program(s):   CF

We show that economic conditions when CEOs enter the labor market have lasting impact on their career paths and managerial styles. Recession CEOs take less time to become CEOs, but manage smaller firms, receive lower compensation, and move less across firms and industries. They also display more conservative styles: lower capital expenditures and R&D, less leverage, more diversification and lower overheads. These results do not seem to be driven by ex ante selection but by their labor-market experience. Recession experience at the time of labor force entry rather than during childhood explains most of the variation in management styles.

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This paper was revised on June 5, 2013

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17590

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