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Why do leaders matter? A study of expert knowledge in a superstar setting

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Author Info

  • Goodall, Amanda H.
  • Kahn, Lawrence M.
  • Oswald, Andrew J.

Abstract

This paper provides evidence of the importance of what might be termed 'expert leaders'. Although it is widely assumed that leaders affect the performance of their organizations, the complexity of this social-science research area has meant that comparatively little empirical progress has been made. We deliberately choose a narrow focus. We examine a high-skill setting in which there are accurate data on performance. We argue that an influential role is played by a leader's expert knowledge. A strong predictor of a leader's success in year T is that person's level of technical attainment, in the underlying activity, in approximately year T-20. Our data are on US professional basketball. The paper documents a correlation between brilliance as a player and the (much later) winning percentage and playoff success of that person as a team coach. The results suggest that leaders' effects on performance are substantial and are visible in the data within the first 12 months of a coach being hired.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 77 (2011)
Issue (Month): 3 (March)
Pages: 265-284

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Handle: RePEc:eee:jeborg:v:77:y:2011:i:3:p:265-284

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Organizational performance Firms Leadership Expert knowledge Fixed-effects Productivity;

References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Marianne Bertrand & Antoinette Schoar, 2003. "Managing With Style: The Effect Of Managers On Firm Policies," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1169-1208, November.
  2. David G. Blanchflower & Andrew J. Oswald & Peter Sanfey, 1992. "Wages, Profits and Rent-Sharing," NBER Working Papers 4222, National Bureau of Economic Research, Inc.
  3. Andrew K.G. Hildreth and Andrew J. Oswald, . "Rent-Sharing and Wages: Evidence from Company and Establishment Panels," Economics Discussion Papers 425, University of Essex, Department of Economics.
  4. Emrah Arbak & Marie-Claire Villeval, 2007. "Endogenous Leadership Selection and Influence," Post-Print halshs-00142461, HAL.
  5. Stefan Szymanski, 2000. "A Market Test for Discrimination in the English Professional Soccer Leagues," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 590-603, June.
  6. Barton Hughes Hamilton, 1997. "Racial discrimination and professional basketball salaries in the 1990s," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 287-296.
  7. Sumon Majumdar & Sharun Mukand, 2007. "The Leader as Catalyst: On Leadership and the Mechanics of Institutional Change," Working Papers 1128, Queen's University, Department of Economics.
  8. Peter Dawson & Stephen Dobson, 2002. "Managerial efficiency and human capital: an application to English association football," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(8), pages 471-486.
  9. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
  10. Sherwin Rosen & Allen Sanderson, 2000. "Labor Markets in Professional Sports," NBER Working Papers 7573, National Bureau of Economic Research, Inc.
  11. Bernd Frick & Robert Simmons, 2008. "The impact of managerial quality on organizational performance: evidence from German soccer," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(7), pages 593-600.
  12. David P. Myatt & Torun Dewan, 2007. "The Qualities of Leadership: Direction, Communication, and Obfuscation," Economics Series Working Papers 311, University of Oxford, Department of Economics.
  13. Goodall, Amanda H., 2009. "Highly cited leaders and the performance of research universities," Research Policy, Elsevier, vol. 38(7), pages 1079-1092, September.
  14. Borghans, Lex & Duckworth, Angela Lee & Heckman, James J. & Weel, Bas ter, 2008. "The Economics and Psychology of Personality Traits," MERIT Working Papers 010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  15. Chifeng Dai & Tracy R. Lewis & Giuseppe Lopomo, 2006. "Delegating management to experts," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 503-520, 09.
  16. Morten Bennedsen & Kasper Meisner Nielsen & Francisco Pérez-González & Daniel Wolfenzon, 2007. "Inside the Family Firm: the Role of Families in Succession Decisions and Performance," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 647-691, 05.
  17. Benjamin F. Jones & Benjamin A. Olken, 2005. "Do Leaders Matter? National Leadership and Growth Since World War II," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 835-864, August.
  18. Dawson, Peter & Dobson, Stephen & Gerrard, Bill, 2000. "Estimating Coaching Efficiency in Professional Team Sports: Evidence from English Association Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(4), pages 399-421, September.
  19. Lawrence M. Kahn, 1993. "Managerial quality, team success, and individual player performance in major league baseball," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(3), pages 531-547, April.
  20. Borghans Lex & Lee Duckworth Angela & Heckman James J. & Weel Bas ter, 2008. "The Economics and Psychology of Personality Traits," ROA Research Memorandum 001, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  21. Borghans, Lex & ter Weel, Bas & Weinberg, Bruce A., 2006. "Interpersonal Styles and Labor Market Outcomes," IZA Discussion Papers 2466, Institute for the Study of Labor (IZA).
  22. repec:rje:randje:v:37:y:2006:3:p:503-520 is not listed on IDEAS
  23. Benjamin E. Hermalin, 1997. "Toward an Economic Theory of Leadership: Leading by Example," Microeconomics 9612002, EconWPA.
  24. Hermalin, Benjamin E., 2007. "Leading for the long term," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 1-19, January.
  25. Steven N. Kaplan & Mark M. Klebanov & Morten Sorensen, 2008. "Which CEO Characteristics and Abilities Matter?," NBER Working Papers 14195, National Bureau of Economic Research, Inc.
  26. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
  27. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
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Citations

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Cited by:
  1. Goodall, Amanda H. & Pogrebna, Ganna, 2012. "Expert Leaders in a Fast-Moving Environment," IZA Discussion Papers 6715, Institute for the Study of Labor (IZA).
  2. Kim, Jaesoo, 2012. "Endogenous leadership in incentive contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 256-266.
  3. Goodall, Amanda H., 2012. "A Theory of Expert Leadership," IZA Discussion Papers 6566, Institute for the Study of Labor (IZA).
  4. Goodall, Amanda H., 2011. "Physician-Leaders and Hospital Performance: Is There an Association?," IZA Discussion Papers 5830, Institute for the Study of Labor (IZA).
  5. Amanda Goodall, 2013. "Should Doctors Run Hospitals?," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 11(1), pages 37-40, 04.

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