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Are Executives in Short Supply? Evidence from Death Events

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  • Julien Sauvagnat
  • Fabiano Schivardi

Abstract

Using exhaustive administrative data on Italian social security records, we construct measures of local labour market thickness for executives that vary by industry and location. We show that firm performance is strongly and persistently affected by executive death, but only in thin local labour markets. The new executives hired after death events in thin local labour markets have lower education levels and are more likely to be replaced. These predictions are consistent with a simple model of executive search in which market thickness determines the arrival rate of applications for executive positions.

Suggested Citation

  • Julien Sauvagnat & Fabiano Schivardi, 2024. "Are Executives in Short Supply? Evidence from Death Events," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(1), pages 519-559.
    • Handle: RePEc:oup:restud:v:91:y:2024:i:1:p:519-559.
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    File URL: https://hdl.handle.net/10.1093/restud/rdad027
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    2. Audinga Baltrunaite & Egle Karmaziene, 2020. "Trainspotting: Board Appointments in Private Firms," Temi di discussione (Economic working papers) 1278, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    Executive supply; Firm performance; Local growth;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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