Selection versus talent effects on firm value

• 成果类型: Article
• 署名作者: Chang, Briana; Hong, Harrison
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; Columbia University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2019.01.001
• 发表日期: 2019
• 页码: 751-763
• 关键词: CEO; Underwriters; IPO underpricing; prestige; Talent; selection; sorting

摘要

Measuring the value of labor-market hires for stock prices, be it underwriters when firms go public (IPOs) or chief executive officers (CEOs), is difficult due to selection. Opaque firms with higher costs of capital benefit more from prestigious underwriters, while productive firms benefit more from talented CEOs. Using assignment models, we show that the importance of talent (or agent heterogeneity) relative to selection (or firm heterogeneity) is measured by wage increases across agents of different compensation ranks divided by changes in output across their firms. The median of this ratio is 0.5% for underwriters and 2% for CEOs. (C) 2019 Elsevier B.V. All rights reserved.