The Match between CEO and Firm* | Zendy

Sam Allgood | Zendy; Kathleen A. Farrell | Zendy

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The Match between CEO and Firm*

Author(s) -

Sam Allgood,

Kathleen A. Farrell

Publication year - 2003

Publication title -

the journal of business

Language(s) - English

Resource type - Journals

eISSN - 1537-5374

pISSN - 0021-9398

DOI - 10.1086/367752

Subject(s) - business , accounting , industrial organization , economics

We investigate the role of job-match heterogeneity in the CEO labor market. We document a high percentage of CEO turnovers in the early years of tenure as illustrated by the hazard that increases until the fifth year of CEO tenure and then decreases. Evidence suggests that a good match is more likely if the new CEO performs better than the previous CEO. The best matches tend to occur when inside (outside) CEOs follow previous CEOs who quit (are dismissed). Evidence consistent with match theory in the CEO labor market suggests factors that influence the likelihood of observing a good match.

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