Managerial ability and success: Evidence from the career paths of film directors

Kose John, S. Abraham Ravid, Jayanthi Sunder

Research output: Contribution to journalArticle

8 Scopus citations

Abstract

We use a unique hand-collected data set covering the entire career path of film directors, who are re-hired (or not) after each and every film project. Film directors manage projects which can cost hundreds of millions of dollars. We examine the inter-temporal dynamics of turnover decisions to disentangle ability revelation from effort incentives and measure the contribution of project managers to project success. We show that the probability of re-hiring is increasing in average returns over an entire career path, rather than just the outcome of the most recent project, supporting an ability revelation interpretation. We also find that promotions are increasing in directors' experience. We create an ability measure for directors, and show that directors can have a significant effect on the financial and critical success of their projects. Our evidence can inform the debate on CEO effects on their firms and projects and contribute to the CEO and executive turnover literature.

Original languageEnglish (US)
Pages (from-to)425-439
Number of pages15
JournalJournal of Corporate Finance
Volume44
DOIs
StatePublished - Jun 2017

Keywords

  • Career path
  • Film directors
  • Job matching
  • Managerial ability

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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