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Managing the Family Firm: Evidence from CEOs at Work

  • Oriana Bandiera

    ()

    (London School of Economics (LSE))

  • Andrea Prat

    ()

    (Columbia University)

  • Raffaella Sadun

    ()

    (Harvard Business School, Strategy Unit)

We develop a new survey instrument to codify CEOs' diaries in large samples and use it to measure the labor supply of 1,114 family and professional CEOs of manufacturing firms across six countries (Brazil, France, Germany, India, the United Kingdom and the United States). By this measure, family CEOs work 9% fewer hours relative to professional CEOs, even when we control for a wide range of CEO, firm and industry characteristics. The differences in hours worked between family and professional CEOs are larger when the opportunity cost of leisure is lower. We interpret these results as evidence of differences in preferences for leisure across CEOs rather than optimal responses to organizational differences correlated with ownership. Differences in labor supply are larger in countries where inheritance laws favor wealth concentration and are correlated with differences in firm performance.

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Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 14-044.

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Length: 50 pages
Date of creation: Dec 2013
Date of revision: Dec 2014
Handle: RePEc:hbs:wpaper:14-044
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Web page: http://www.hbs.edu/

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  2. ., 1994. "Firm, Theoru of the (II)," Chapters, in: The Elgar Companion to Institutional and Evolutionary Economics, chapter 45 Edward Elgar.
  3. Oriana Bandiera & Luigi Guiso & Andrea Prat & Raffaella Sadun, 2012. "What Do CEOs Do?," CEP Discussion Papers dp1145, Centre for Economic Performance, LSE.
  4. Oriana Bandiera & Luigi Guiso & Andrea Prat & Raffaella Sadun, 2009. "Matching Firms, Managers, and Incentives," EIEF Working Papers Series 0901, Einaudi Institute for Economics and Finance (EIEF), revised Feb 2009.
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