The Age Effect of Entrepreneurship: Founder's Tenure, Firm Performance and the Economic Environment
AbstractThis paper tests the effect of founder's tenure on firm performance by taking into account the impact of the changes occurring in the economic environment. We use a large dataset of founder-run firms that includes, in addition to financial data, company data directly collected through a survey of about 2,000 Italian firms. Unlike the negative relationship reported in most empirical papers, we found an inverted U-shaped relationship between founder-CEO tenure and firm performance. This relationship is strongly influenced by the characteristics of the environment in which the company competes: while experience plays a key role in fostering performance in less innovativeand less competitive sectors, a dynamic environment makes the performance of the firm less responsive to the benefits of founder tenure. From the viewpoint of policy, growing environment dynamism calls for greater efficiency of the market for corporate control, in order to assure a continued match between skills of CEOs and the external environment.
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Bibliographic InfoPaper provided by Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences in its series Mo.Fi.R. Working Papers with number 21.
Date of creation: Mar 2009
Date of revision:
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More information through EDIRC
ageing; changing environment; entrepreneurship; founder-run firms;
Other versions of this item:
- Marco Cucculelli & Giacinto Micucci, 2009. "The Age Effect in Entrepreneurship: Founder’s Tenure, Firm Performance, and the Economic Environment," CRIEFF Discussion Papers 0903, Centre for Research into Industry, Enterprise, Finance and the Firm.
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
This paper has been announced in the following NEP Reports:
- NEP-AGE-2009-04-05 (Economics of Ageing)
- NEP-ALL-2009-04-05 (All new papers)
- NEP-CSE-2009-04-05 (Economics of Strategic Management)
- NEP-ENT-2009-04-05 (Entrepreneurship)
- NEP-LAB-2009-04-05 (Labour Economics)
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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