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Why Do Leaders Matter? The Role of Expert Knowledge

Author

Listed:
  • Goodall, Amanda H.

    () (Cass Business School)

  • Kahn, Lawrence M.

    () (Cornell University)

  • Oswald, Andrew J.

    () (University of Warwick)

Abstract

Why do some leaders succeed while others fail? This question is important, but its complexity makes it hard to study systematically. We examine an industry in which there are well-defined objectives, small teams, and exact measures of leaders’ characteristics. We show that a strong predictor of a leader’s success in year T is that person’s own level of attainment, in the underlying activity, in approximately year T-20. Our data come from 15,000 professional basketball games. The effect on team performance of the coach’s ‘expert knowledge’ is large and is discernible in the data within 12 months of his being hired.

Suggested Citation

  • Goodall, Amanda H. & Kahn, Lawrence M. & Oswald, Andrew J., 2008. "Why Do Leaders Matter? The Role of Expert Knowledge," IZA Discussion Papers 3583, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3583
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    References listed on IDEAS

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    1. Hildreth, Andrew K G & Oswald, Andrew J, 1997. "Rent-Sharing and Wages: Evidence from Company and Establishment Panels," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 318-337, April.
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    3. Dewan, Torun & Myatt, David P., 2008. "The Qualities of Leadership: Direction, Communication, and Obfuscation," American Political Science Review, Cambridge University Press, vol. 102(03), pages 351-368, August.
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    10. Goodall, Amanda H., 2009. "Highly cited leaders and the performance of research universities," Research Policy, Elsevier, vol. 38(7), pages 1079-1092, September.
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    13. Kahn, Lawrence M & Sherer, Peter D, 1988. "Racial Differences in Professional Basketball Players' Compensation," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 40-61, January.
    14. Sumon Majumdar & Sharun Mukand, 2007. "The Leader as Catalyst: On Leadership and the Mechanics of Institutional Change," Working Papers 1128, Queen's University, Department of Economics.
    15. Amanda H Goodall, 2005. "Should Research Universities be Led by Top Researchers? Part 1: Are they?," HEW 0506003, EconWPA.
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    Citations

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    Cited by:

    1. Goodall, Amanda H., 2009. "Highly cited leaders and the performance of research universities," Research Policy, Elsevier, vol. 38(7), pages 1079-1092, September.
    2. Sue Bridgewater & Lawrence M. Kahn & Amanda H. Goodall, 2009. "Substitution Between Managers and Subordinates: Evidence from British Football," NCER Working Paper Series 51, National Centre for Econometric Research.
    3. Goodall, Amanda H., 2011. "Physician-leaders and hospital performance: Is there an association?," Social Science & Medicine, Elsevier, vol. 73(4), pages 535-539, August.
    4. Goodall, Amanda H. & Pogrebna, Ganna, 2012. "Expert Leaders in a Fast-Moving Environment," IZA Discussion Papers 6715, Institute for the Study of Labor (IZA).
    5. Gürerk, Özgür & Irlenbusch, Bernd & Rockenbach, Bettina, 2009. "Motivating teammates: The leader's choice between positive and negative incentives," Journal of Economic Psychology, Elsevier, vol. 30(4), pages 591-607, August.
    6. Amanda Goodall, 2013. "Should Doctors Run Hospitals?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(1), pages 37-40, 04.
    7. Goodall, Amanda H., 2012. "A Theory of Expert Leadership," IZA Discussion Papers 6566, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    leadership; productivity; firms; organizational performance; fixed-effects;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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