Nepotism doesnt work

-

Who knew! It turns out that the data are actually against it - Nepotism makes companies underperform...

Pérez-González, Francisco 2006. "Inherited Control and Firm Performance."American Economic Review, 96(5): 1559–1588.
I use data from chief executive officer (CEO) successions to examine the impact of inherited control on firms? performance. I find that firms where incoming CEOs are related to the departing CEO, to a founder, or to a large shareholder by either blood or marriage underperform in terms of operating profitability and market-to-book ratios, relative to firms that promote unrelated CEOs. Consistent with wasteful nepotism, lower performance is prominent in firms that appoint family CEOs who did not attend ?selective? undergraduate institutions. Overall, the evidence indicates that nepotism hurts performance by limiting the scope of labor market competition (more...)

Comments

Post a Comment

Popular posts from this blog

Cannonball Tree!

-
Image
Spotted this one just outside the Ravindra Kalakshetra in Bangalore .  Its called the Cannonball Tree , but is - technically (i.e., in Latin, if thats your metier) - Couroupita Guianensis , or ನಾಗಲಿಂಗ ಪುಷ್ಪಾ  in Kannada. The fruits look like Cannonballs (well, d-uh), and the flowers are really quite amazing, and pretty ludicrously distinctive...
Read more

Erlang, Binaries, and Garbage Collection (Sigh)

-
Image
The nice thing about garbage-collection is that it is makes memory management absolutely transparent to you Of course, the above is true right up to the point when it stops being transparent, at which point it does a phase change from nice to clusterf**k of biblical proportions .  There are entire posts, books, and suicide notes that have been written about this, and I have no great desire to add to them, save with the minor comment that paranoia about garbage-collection is still justified , albeit only in the edge-cases for most people. That said, I'll give you that Erlang GC is in many ways much, much better positioned in this regard than, oh, Java, but it still rears up and bites you in the butt when you least expect it. ( More information about Erlang's GC vis-a-vis Java here , and Jesper's truly excellent description of Erlang's GC here ).  A story from the past should serve to illustrate this. Once upon a time, in a magical land far far away - well, Her
Read more

Visualizing Prime Numbers

-
Image
From Jason Davies , we have El Patron de Los Primos , probably one of the coolest prime number visualizer that I've seen.  For every Natural number, he draws a periodic curve that intersects at that number and each of its multiples.  Needless to say, prime numbers are touched by only two curves (itself and 1 ). You can scroll to the right, and move up the prime food change. (The image above is a screen grab.  Go here to see the actual thing)
Read more