Review of Corporate Finance > Vol 2 > Issue 1

Are CEOs to Blame for Corporate Failure? Evidence from Chapter 11 Filings

Rajib Chowdhury, College of Business, Minnesota State University, USA, , John A. Doukas, Strome College of Business, Old Dominion University, USA, and Judge Business School, University of Cambridge, UK,
Suggested Citation
Rajib Chowdhury and John A. Doukas (2022), "Are CEOs to Blame for Corporate Failure? Evidence from Chapter 11 Filings", Review of Corporate Finance: Vol. 2: No. 1, pp 1-63.

Publication Date: 02 Mar 2022
© 2022 R. Chowdhury and J. A. Doukas
Corporate finance,  Executive compensation,  Management control,  Performance measurement
JEL Codes: G14, G32, G34
Corporate failureChapter 11 filingsmanagerial ability


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In this article:
Literature Review and Hypothesis Development 
Data and Methodology 
Empirical Results 


This study examines whether chief executive officers (CEOs) are to blame for corporate failures. Using alternative CEO managerial ability measures, we document that high-ability (low-ability) CEOs are less (more) likely to be associated with bankruptcy. We also find that reorganized firms run by high-ability incumbent CEOs experience improved financial performance after filing for Chapter 11. Firms that hire high-ability CEOs with bankruptcy experience also realize improved financial performance. Our evidence indicates that the likelihood of corporate bankruptcy is unrelated to the presence of high-ability managers and that bankruptcy does not adversely affect the post-bankruptcy careers of high-ability CEOs.