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  3. American Economic Review
  4. May 2016
  5. Does the Market Value CEO Styles?

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Does the Market Value CEO Styles?

  • Antoinette Schoar
  • Luo Zuo
American Economic Review
vol. 106, no. 5, May 2016
(pp. 262–66)
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Abstract

We study how investors perceive the skill set that different types of CEOs bring into their companies. We compare CEOs who started their careers during a recession with other CEOs. We show that the announcement return around the appointment of a recession CEO is very significant and positive, and this positive market reaction is driven by cases where a recession CEO replaces a non-recession CEO. Our results indicate that the market assigns a positive and economically meaningful value to a recession CEO, suggesting that there is a limited supply of these types of CEOs in the executive labor market.

Citation

Schoar, Antoinette, and Luo Zuo. 2016. "Does the Market Value CEO Styles?" American Economic Review, 106 (5): 262–66. DOI: 10.1257/aer.p20161031

Additional Materials

JEL Classification

  • E32 Business Fluctuations; Cycles
  • G14 Information and Market Efficiency; Event Studies; Insider Trading
  • G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
  • G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
  • M12 Personnel Management; Executives; Executive Compensation
  • M52 Personnel Economics: Compensation and Compensation Methods and Their Effects