Finance paper accepted for publication in the Journal of Financial Economics

Aalto Distinguished Professor Matti Keloharju’s paper “Are CEOs Born Leaders? Lessons from Traits of a Million Individuals” has been accepted for publication in the Journal of Financial Economics. The paper’s co-authors are Renee B. Adams, University of New South Wales and Samuli Knüpfer, BI Norwegian Business School.

Abstract of the paper:

What makes a successful CEO? We combine a near-exhaustive sample of CEOs of Swedish companies with data on their cognitive and non-cognitive ability and height at age 18. CEOs differ from other high-skill professions most in non-cognitive ability. The median large-company CEO belongs to the top 5% of the population in the combination of the three traits. The traits have a monotonic and close to linear relationship with CEO pay, but their correlations with pay, firm size, and CEO fixed effects in firm policies are relatively low. Traits appear necessary, but not sufficient for making it to the top.