CEO tenure and firm value

2021 ◽  
Author(s):  
Francois Brochet ◽  
Peter Limbach ◽  
Markus Schmid ◽  
Meik Scholz-Daneshgari
Keyword(s):  
Labor Market ◽  
Firm Value ◽  
Market Frictions ◽  
Match Quality ◽  
Optimal Matching ◽  
First Order ◽  
Ceo Tenure ◽  
Labor Market Frictions ◽  
Value Association ◽  
Ceo Characteristics

Our study is the first to provide systematic evidence of a hump-shaped CEO tenure-firm value relation. Cross-sectionally, firm value starts to decline after fewer years of CEO tenure in more dynamic industries, if CEOs are less adaptable to changes, and in the presence of lower labor market frictions. Overall, the dynamics of CEO-firm match quality appear to be a first-order driver of the CEO tenure-firm value association, as explained by CEO characteristics (adaptability), firm/industry characteristics (dynamism), and labor market characteristics that facilitate optimal matching between firms and CEOs.

scholarly journals Trade and Frictional Unemployment in the Global Economy

2020 ◽  
Vol 18 (6) ◽  
pp. 2869-2921 ◽  
Author(s):  
Céline Carrère ◽  
Anja Grujovic ◽  
Frédéric Robert-Nicoud
Keyword(s):  
United States ◽  
Labor Market ◽  
Global Economy ◽  
The United States ◽  
Market Frictions ◽  
Unemployment Benefits ◽  
Trade Model ◽  
Labor Market Frictions ◽  
Trade Opening ◽  
Employment Data

Abstract We develop a multicountry, multisector trade model featuring risk-averse workers, labor market frictions, unemployment benefits, and equilibrium unemployment. Trade opening leads to a reduction in unemployment when it simultaneously raises welfare and reallocates labor toward sectors with lower-than-average labor market frictions. We then estimate and calibrate the model using employment data from 31 OECD countries and worldwide trade data. Finally, we quantify the potential unemployment, real wage, and welfare effects of repealing NAFTA and raising bilateral tariffs between the United States and Mexico to 20%. This policy would increase unemployment by 2.4% in the United States and 48% in Mexico.

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