A great CEO's impact lasts for years after they leave—and so does a terrible one's.
April 16, 2026
Original Paper
Managers and the Persistence of Productivity
SSRN · 6516199
The Takeaway
Most corporate models assume a manager's impact ends the day they resign, but this paper finds that 'managerial ghosts' are real. The structural changes a leader makes to firm scale, sales, and employment persist for a long time, meaning standard models understate a CEO's total effect by up to 60%. If a manager builds a culture of efficiency (or a mess of bureaucracy), that legacy sticks to the company’s bones. This means that when a company hires a new star CEO, they are often still fighting the 'gravity' of the person who left three years ago. For employees, it means your daily work life is likely still being dictated by a boss you haven't seen in years.
From the abstract
Standard two-way fixed effects models assume that a manager's effect on performance is fully realized upon assignment. We develop a framework in which plant output depends on a latent managerial stock that depreciates at rate δ and is replenished by the current manager's productivity. We prove that δ is point-identified and that ignoring persistence understates both managerial productivity dispersion and the variance share attributable to managers. Applying our framework to CEO data, we estimate