Managing the Family Firm: Evidence from CEOs at Work

56 Pages Posted: 2 Feb 2015

See all articles by Oriana Bandiera

Oriana Bandiera

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Andrea Prat

Columbia Business School - Finance and Economics; Centre for Economic Policy Research (CEPR)

Raffaella Sadun

Harvard University - Strategy Unit; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: February 2015

Abstract

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.

Keywords: CEO, family firm, time use

JEL Classification: I23

Suggested Citation

Bandiera, Oriana and Prat, Andrea and Sadun, Raffaella, Managing the Family Firm: Evidence from CEOs at Work (February 2015). CEPR Discussion Paper No. DP10379, Available at SSRN: https://ssrn.com/abstract=2559320

Oriana Bandiera (Contact Author)

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

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Andrea Prat

Columbia Business School - Finance and Economics ( email )

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Centre for Economic Policy Research (CEPR)

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Raffaella Sadun

Harvard University - Strategy Unit ( email )

Harvard Business School
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HOME PAGE: http://people.hbs.edu/rsadun

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