NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Economic conditions when CEOs enter the labor market have a lasting impact on their career paths and managerial styles. Managers who begin their careers during a recession become CEOs more quickly, but at smaller firms. Recession CEOs also display a more conservative style, with less investment in capex and R&D, more cost cutting, and lower leverage, working capital needs, sales growth, and stock return volatility. The career effects appear to be driven by differences in these CEOs’ first jobs, and suggest that the early work environment is important to the formation and selection of managers.

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This paper was revised on March 2, 2016

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Document Object Identifier (DOI): 10.3386/w17590

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