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Managing the family firm: evidence from CEOs at work

Bandiera, Oriana, Prat, Andrea and Sadun, Raffaella (2013) Managing the family firm: evidence from CEOs at work. Economic Organisation and Public Policy Discussion Papers (EOPP 049). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.

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CEOs affect the performance of the firms they manage, and family CEOs seem to weaken it. Yet little is known about what top executives actually do, and whether it differs by firm ownership. We study CEOs in the Indian manufacturing sector, where family ownership is widespread and the productivity dispersion across firms is substantial. Time use analysis of 356 CEOs of listed firms yields three sets of findings. First, there is substantial variation in the number of hours CEOs devote to work activities, and longer working hours are associated with higher firm productivity, growth, profitability and CEO pay. Second, family CEOs record 8% fewer working hours relative to professional CEOs. The difference in hours worked is more pronounced in low competition environments and does not seem to be explained by measurement error. Third, difference in diffrences estimates with respect to the cost of effort, due to weather shocks and popular sport events, reveal that the observed difference between family and professional CEOs is consistent with heterogeneous preferences for work versus leisure. Evidence from six other countries reveals similar findings in economies at different stages of development.

Item Type: Monograph (Report)
Official URL:
Additional Information: © 2013 The Authors
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
Date Deposited: 23 Jul 2014 10:04
Last Modified: 25 Aug 2021 23:07
Funders: Columbia Business School, Harvard Business School, International Growth Center, Kauffman Foundation

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