Journal of Law, Finance, and Accounting > Vol 6 > Issue 1

Competition for Managers and Corporate Governance

Viral Acharya, NYU, CEPR, ECGI, NBER, USA, , Marc Gabarro, University of Mannheim, Germany, , Paolo Volpin, City University of London,, UK,
Suggested Citation
Viral Acharya, Marc Gabarro and Paolo Volpin (2021), "Competition for Managers and Corporate Governance", Journal of Law, Finance, and Accounting: Vol. 6: No. 1, pp 179-219.

Publication Date: 06 May 2021
© 2021 V. Acharya, M. Gabarro and P. Volpin
Corporate governance,  Corporate finance,  Principal-Agent
JEL Codes: G3, G38
Corporate governancecompetition for managersCEO duality


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In this article:
1. Introduction 
2. Model 
3. Empirical Strategy 
4. Empirical Results 
5. Further Analysis 
6. Conclusion 
Appendix A. Proofs 
Appendix B. Variable Definition 


Why do half of S&P 500 firms have duality, that is, a CEO who is also the Chair of the Board? We show theoretically that duality can play an important role in the competition for CEOs. Empirically, we document that duality changes are concentrated at times when new CEOs are hired and firms are more likely to offer duality to CEOs with greater ability. This finding is robust to different measures of CEO ability and types of succession plans. We also show that the correlation between duality and CEO ability is stronger in industries that feature a greater competition for CEOs.