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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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:
Contact details of provider:
Postal: Piazzale Martelli, 8 6012 Ancona
Phone: +39 071 220 7083
Fax: +39 071 220 7102
Web page: http://sites.google.com/site/mofirunivpm/
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.:
- Sumit Agarwal & John C. Driscoll & Xavier Gabaix & David Laibson, 2007.
"The Age of Reason: Financial Decisions Over the Lifecycle,"
NBER Working Papers
13191, National Bureau of Economic Research, Inc.
- Sumit Agarwal & John C. Driscoll & Xavier Gabaix & David Laibson, 2007. "The age of reason: financial decisions over the lifecycle," Working Paper Series WP-07-05, Federal Reserve Bank of Chicago.
- Xavier Gabaix & John C. Driscoll & David Laibson & Sumit Agarwal, 2008. "The Age of Reason: Financial Decisions Over the Lifecycle," 2008 Meeting Papers 322, Society for Economic Dynamics.
- Sumit Agarwal & John C Driscoll & Xavier Gabaix & David Laibson, 2007. "The Age of Reason: Financial Decisions Over the Lifecycle," Levine's Bibliography 122247000000001752, UCLA Department of Economics.
- David G. Blanchflower & Andrew Oswald, 2007.
"Is Well-being U-Shaped over the Life Cycle?,"
NBER Working Papers
12935, National Bureau of Economic Research, Inc.
- Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-Being U-Shaped over the Life Cycle?," IZA Discussion Papers 3075, Institute for the Study of Labor (IZA).
- Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-being U-Shaped over the Life Cycle?," The Warwick Economics Research Paper Series (TWERPS) 826, University of Warwick, Department of Economics.
- Fredrik Andersson & Matthew Freedman & John C. Haltiwanger & Julia Lane & Kathryn L. Shaw, 2006.
"Reaching for the Stars: Who Pays for Talent in Innovative Industries?,"
NBER Working Papers
12435, National Bureau of Economic Research, Inc.
- Fredrik Andersson & Matthew Freedman & John Haltiwanger & Julia Lane & Kathryn Shaw, 2009. "Reaching for the Stars: Who Pays for Talent in Innovative Industries?," Economic Journal, Royal Economic Society, vol. 119(538), pages F308-F332, 06.
- Agustí Segarra & Maria Callejón, 2002. "New Firms' Survival and Market Turbulence: New Evidence from Spain," Review of Industrial Organization, Springer, vol. 20(1), pages 1-14, February.
- Bernadette Power & Gavin Reid, 2005. "Flexibility, Firm-Specific Turbulence and the Performance of the Long-lived Small Firm," Review of Industrial Organization, Springer, vol. 26(4), pages 415-443, 06.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maurizio Mariotti).
If references are entirely missing, you can add them using this form.