PhD CEOs and firm performance

Andrew Urquhart; Hanxiong Zhang

doi:10.1111/eufm.12316

PhD CEOs and firm performance

Andrew Urquhart
, Hanxiong Zhang

Research output: Contribution to journal › Article › peer-review

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Abstract

This paper investigates the relationship between the education of a Chief Executive Officer (CEO) and firm performance and provides robust evidence that firms led by CEOs with PhDs outperform their peers. We find that CEOs with PhDs increase firm performance by 3.03% while CEOs with a PhD from a highly ranked university increase firm performance by 4.65%. Our results are robust to endogenous CEO selection, transition firms, alternative rankings, unobserved firm characteristics and the network of the CEO. We also show that the increase in firm performance is due to a tighter control of costs and superior cash flow management.

Original language	English
Journal	European Financial Management
DOIs	https://doi.org/10.1111/eufm.12316
Publication status	Published - 2022
Externally published	Yes

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10.1111/eufm.12316Licence: CC BY

Euro Fin Management - 2021 - Urquhart - PhD CEOs and firm performanceFinal published version, 2.17 MBLicence: CC BY

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title = "PhD CEOs and firm performance",

abstract = "This paper investigates the relationship between the education of a Chief Executive Officer (CEO) and firm performance and provides robust evidence that firms led by CEOs with PhDs outperform their peers. We find that CEOs with PhDs increase firm performance by 3.03\% while CEOs with a PhD from a highly ranked university increase firm performance by 4.65\%. Our results are robust to endogenous CEO selection, transition firms, alternative rankings, unobserved firm characteristics and the network of the CEO. We also show that the increase in firm performance is due to a tighter control of costs and superior cash flow management.",

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AB - This paper investigates the relationship between the education of a Chief Executive Officer (CEO) and firm performance and provides robust evidence that firms led by CEOs with PhDs outperform their peers. We find that CEOs with PhDs increase firm performance by 3.03% while CEOs with a PhD from a highly ranked university increase firm performance by 4.65%. Our results are robust to endogenous CEO selection, transition firms, alternative rankings, unobserved firm characteristics and the network of the CEO. We also show that the increase in firm performance is due to a tighter control of costs and superior cash flow management.

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PhD CEOs and firm performance

Abstract

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