Abstract
We explore how CEO ownership a¤ects productivity in small and large firms. We use administrative panel data on the universe of limited lia- bility firms in Finland and exploit plausibly exogenous variations to CEO ownership induced by shocks to the CEO spouse's health. We document a substantial increase in productivity when the CEO obtains majority owner- ship or when the majority owner becomes the CEO. While typical samples focus on large public rms, we show that our e¤ects are stronger in medium- sized private firms. Consistently with the quiet life hypothesis, we show that increased ownership boosts CEO's effort at work.
Keywords
CEO ownership; firm productivity; SME.;
JEL codes
- G30: General
- M12: Personnel Management • Executives; Executive Compensation
- D24: Production • Cost • Capital • Capital, Total Factor, and Multifactor Productivity • Capacity
- E23: Production
- L25: Firm Performance: Size, Diversification, and Scope
Reference
Milo Bianchi, and Henri Luomaranta, “Agency Costs in Small Firms”, TSE Working Paper, n. 21-1252, August 2021, revised September 2025.
See also
Published in
TSE Working Paper, n. 21-1252, August 2021, revised September 2025