Inherited control and firm performance

• 成果类型: Article
• 署名作者: Perez-Gonzalez, Francisco
• 署名单位: Columbia University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.96.5.1559
• 发表日期: 2006
• 页码: 1559-1588
• 关键词: corporate-ownership; FAMILY OWNERSHIP; market valuation; ceo turnover; mechanisms; SEPARATION; succession; returns; POWER

摘要

I use data from chief executive officer (CEO) successions to examine the impact of inherited control on firms' performance. I find that firms where incoming CEOs are related to the departing CEO, to a founder, or to a large shareholder by either blood or marriage underperform in terms of operating profitability and market-to-book ratios, relative to firms that promote unrelated CEOs. Consistent with wasteful nepotism, lower performance is prominent in firms that appoint family CEOs who did not attend selective undergraduate institutions. Overall, the evidence indicates that nepotism hurts performance by limiting the scope of labor market competition.