Shining Brighter Than The Stars? Corporate Evidence on Competing with Superstars

This paper investigates the effect of superstar CEOs on their competitors. Exploiting shocks to CEO status due to awards provided by major media outlets, we document a significant outperformance of competitors of superstar CEOs to a control sample of competitors of observationally equivalent CEOs who do not win an award. We observe an increase in risk-taking of superstar competitors subsequent to the award and identify an increase in innovation activity as a channel of the increased risk-taking. Our empirical identification strategy uses matching techniques to ensure that our treatment and control samples behave very similarly prior to the CEO award, alleviating endogeneity concerns and supporting a causal interpretation of our results.