Managing with Style: The Effect of Managers on Firm Policies

This paper investigates whether and how individual managers affect corporate behavior and performance. We construct a manager-firm matched panel data set which enables us to track the top managers across different firms over time. We find that manager fixed effects matter for a wide range of corporate decisions. A significant extent of the heterogeneity in investment, financial, and organizational practices of firms can be explained by the presence of manager fixed effects. We identify specific patterns in managerial decision-making that appear to indicate general differences in "style" across managers. Moreover, we show that management style is significantly related to manager fixed effects in performance and…