Giordano Mion, Luca David Opromolla, Alessandro Sforza, 21 January 2017

Despite the seemingly obvious link between good management and firm performance, establishing a causal link between the two is actually rather tricky. This column examines how Portuguese firms responded to the sudden and unexpected end to the civil war in Angola in 2002, and discovers an immediate spike in export entry rates for firms with at least one manager with previous experience of exporting to Angola. This finding on the impact of acquired knowledge on performance is especially useful for firms looking to operate in foreign markets.

Itzhak Ben-David, John Graham, Campbell Harvey, 20 August 2016

Experiments have revealed that humans often suffer from overconfidence in the accuracy of their information, or ‘miscalibration’. This column uses data from surveys of CFOs to assess their ability to make financial predictions. The results suggest not only that CFOs are miscalibrated, but also that firms with miscalibrated executives appear to be more aggressive in their corporate policies. In other words, the overconfidence of the executive shows up in the company’s policies.

Amanda Goodall, Ganna Pogrebna, 23 September 2012

In recent years major firms have moved away from hiring CEOs with technical expertise towards instead hiring leaders who are managers with generalist skills. This is wrong, according to the evidence presented in this column. In the highly-skilled setting of Formula One racing, the authors show that it is the experts who excel as leaders not managers.

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