What's in an education? Implications of CEO education for bank performance

Timothy King*, Abhishek Srivastav, Jonathan Williams

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Exploiting a unique hand-built dataset, this paper finds that CEO educational attainment, both level and quality, matters for bank performance. We offer robust evidence that banks led by CEOs with MBAs outperform their peers. Such CEOs improve performance when compensation structures are geared towards greater risk-taking incentives, and when banks follow riskier or more innovative business models. Our findings suggest that management education delivers skills enabling CEOs to manage increasingly larger and complex banking firms and achieve successful performance outcomes. (C) 2016 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)287-308
Number of pages22
JournalJournal of Corporate Finance
Volume37
Early online date15 Jan 2016
DOIs
Publication statusPublished - Apr 2016

Keywords

  • CEO education
  • CEO compensation
  • banks
  • bank performance
  • executive compensation
  • risk taking
  • financial policies
  • firm performance
  • commercial banks
  • work experience
  • upper echelons
  • incentives
  • pay
  • managers

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