Managing the Family Firm: Evidence from CEOs at Work

Abstract

We build a comparable and bottom-up measure of CEO labor supply for 1,114 CEOs and investigate whether family and professional CEOs differ along this dimension. Family CEOs work 9% fewer hours relative to professional CEOs. CEO hours worked are positively correlated with firm performance and account for 18% of the performance gap between family and professional CEOs. We study the sources of the differences in labor supply across family and professional CEOs by exploiting firm and industry heterogeneity and variation in meteorological and sports events. Evidence suggests that family CEOs value or can pursue leisure activities more so than professional CEOs.

Received July 31, 2015; editorial decision August 31, 2017 by Editor Andrew Karolyi. Authors have furnished supplementary code/data, which is available on the Oxford University Press Web site next to the link to the final published paper online.