infonet-economy

This paper investigates the effect of superstar CEOs on their competitors.
Exploiting shocks to CEO status due to awards provided by major media outlets,
we document a significant outperformance of competitors of superstar CEOs to a
control sample of competitors of observationally equivalent CEOs who do not win
an award. We observe an increase in risk-taking of superstar competitors
subsequent to the award and identify an increase in innovation activity as a
channel of the increased risk-taking. Our empirical identification strategy uses
matching techniques to ensure that our treatment and control samples behave very
similarly prior to the CEO award, alleviating endogeneity concerns and
supporting a causal interpretation of our results.