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Generalist CEOs and operational efficiency

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  • Chung, Hanyong

Abstract

This study examines the relationship between CEO general managerial ability and firm operational efficiency. I find a robust negative association between a CEO’s General Ability Index (GAI) and firm efficiency. Additionally, the analysis shows that GAI influences operational efficiency through two mechanisms: capital intensity and SG&A cost efficiency. Cross-sectional analyses reveal that the negative effect is more pronounced in smaller firms and those with smaller boards, suggesting that limited structural support may amplify the operational challenges generalist CEOs face. This study underscores the importance of contextual CEO-firm alignment and provides practical implications for boards and investors when evaluating executive fit for operational effectiveness.

Suggested Citation

  • Chung, Hanyong, 2025. "Generalist CEOs and operational efficiency," Finance Research Letters, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:finlet:v:84:y:2025:i:c:s1544612325010815
    DOI: 10.1016/j.frl.2025.107823
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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