Managing the Family Firm: Evidence from CEOs at Work
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.
We would like to thank Marianne Bertrand, Nick Bloom, Deepak Hegde, Luis Garicano, Lakshmi Iyer, Daniel Paravisini, Damon Phillips, Antoinette Schoar, Scott Stern, John Van Reenen, DanielWolfenzon, Chris Woodruff, Julie Wulf, and participants at seminars in Bocconi, Columbia, Duke, Frankfurt, Georgia Tech, Harvard, Helsinki, LBS, LSE, Mannheim, Michigan, MIT, Munich, Northwestern, Queens Business School, Stanford, AEA, EEA, EARIE and NBER Summer Meetings for useful comments. Anjali Reina and Tanya Bijlani from the HBS India Research Center have been particularly important in the development of the project. Kashyap Shah has provided excellent research assistance. We would like to thank Columbia Business School, Harvard Business School, the International Growth Center, and the Kauffman Foundation for their financial support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Bandiera, Oriana, Andrea Prat, Renata Lemos, and Raffaella Sadun. "Managing the Family Firm: Evidence from CEOs at Work." Review of Financial Studies (forthcoming). citation courtesy of