Understanding how much influence managers have over firm performance has been one of the central questions in strategic management during the last five decades. Despite sustained scholarly interest in this question, the results of the empirical studies have been inconsistent and increasingly divergent. In this dissertation, I suggest that the current theorizing on this question has failed to consider the role of complementarities - or fit - between managers and firms in determining firm performance. To illuminate the role of complementarities as a source of variation in firm performance, I combine a proprietary dataset containing information on top management teams for every company in the Compustat sample with a novel Group Fixed Effect estimator based on machine learning. My findings provide new insights into the factors that affect firm performance and have implications for the Upper Echelons and agency theories.
Read
