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When is human capital a valuable resource? The performance effects of Ivy league selection among celebrated CEOs

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  • Danny Miller
  • Xiaowei Xu
  • Vikas Mehrotra

Abstract

type="main" xml:id="smj2251-abs-0001"> We investigate whether and when highly trained human capital constitutes a rent-sustaining resource. Our study of 444 CEOs celebrated on the covers of major U.S. business magazines found an advantage accruing to graduates of selective universities. Such CEOs led firms with higher and more sustained market valuations. The advantage was strongest for undergraduate programs as these related to the kinds of talent demanded of a CEO. The advantage also was greatest in smaller firms where CEO discretion might be highest and for younger CEOs who may benefit most from college and are less able to appropriate rents. Finally, the advantage accrued to graduates of more recent years, when selective schools had become less socially elitist and increasingly meritocratic, thus favoring human versus social capital. Copyright © 2014 John Wiley & Sons, Ltd.

Suggested Citation

  • Danny Miller & Xiaowei Xu & Vikas Mehrotra, 2015. "When is human capital a valuable resource? The performance effects of Ivy league selection among celebrated CEOs," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 930-944, June.
  • Handle: RePEc:bla:stratm:v:36:y:2015:i:6:p:930-944
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    File URL: http://hdl.handle.net/10.1002/smj.2251
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    Cited by:

    1. Sam Tavassoli & Lars Bengtsson & Charlie Karlsson, 2017. "Strategic entrepreneurship and knowledge spillovers: spatial and aspatial perspectives," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 233-249, March.
    2. Michael L. McDonald & Poonam Khanna & Jason Cavich, 2015. "A Review of Recent Research on CEOs’ Influence on Firm Performance," Working Papers 0193mgt, College of Business, University of Texas at San Antonio.
    3. repec:eee:jobhdp:v:148:y:2018:i:c:p:30-53 is not listed on IDEAS
    4. repec:spr:jglont:v:7:y:2017:i:1:d:10.1186_s40497-017-0074-2 is not listed on IDEAS
    5. Florian Fuchs & Roland Füss & Tim Jenkisnon & Stefan Morkoetter, 2018. "Should Investors Care Where Private Equity Managers Went To School?," Working Papers on Finance 1806, University of St. Gallen, School of Finance.
    6. repec:kap:jbuset:v:154:y:2019:i:2:d:10.1007_s10551-017-3450-5 is not listed on IDEAS
    7. repec:eee:proeco:v:208:y:2019:i:c:p:241-253 is not listed on IDEAS
    8. repec:eee:iburev:v:26:y:2017:i:5:p:908-926 is not listed on IDEAS
    9. repec:eee:touman:v:61:y:2017:i:c:p:553-561 is not listed on IDEAS
    10. King, Timothy & Srivastav, Abhishek & Williams, Jonathan, 2016. "What's in an education? Implications of CEO education for bank performance," Journal of Corporate Finance, Elsevier, vol. 37(C), pages 287-308.
    11. repec:bla:stratm:v:38:y:2017:i:9:p:1895-1914 is not listed on IDEAS

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