We investigate empirically a market-based explanation for the rise in recent years in external CEO hiring and compensation. Consistent with the market-based theory, we find that firms in industries relying on general managerial skills are more likely to hire CEOs externally than firms in...

Do CEOs really matter for firm performance? And if they do, how does CEO human capital translate into firm value? We investigate these questions using a sample of firms with CEO turnover. We find that when a CEO with more general managerial human capital is matched with a firm relying more on...