Successful CEO Founder’s Characteristics and Its Impact on Investment Return of Entrepreneurial Firms


  • Muhammad Haseeb
  • Ali Awais Khalid
  • Afaf Mudassar



Entrepreneurial firms, CEOs, Investment return, Upper Echelon Theory


objectives – The purpose of this study is to test the impact of founder’s personal characteristics on investment return of entrepreneurial firms operating in Silicon Valley from 2001 to 2015. Moreover, we extended the upper echelon theory by bridging the founder characteristics and investment returns of entrepreneurial firms in Silicon Valley as these firms have higher resources and it’s interesting to observe findings in these firms.
Design/methodology/approach – The data of 765 entrepreneurial firms initially gathered from datastream and LexisNexis Academic database from 2001 to 2015 from which we retained 58 firms in our final sample after excluding financial firms, delisted, merged or acquired firms and firms having no data about CEOs characteristics.
Findings –Our findings suggest that age is positively and significantly related with the total return comparative and with the use of total investment return proxy the effect of age is negative and insignificant that suggests that older founders lose wealth. We find support to our second hypothesis regarding tenure that shows negative and highly significant impact on total return comparative and negative with the total investment return proxy but insignificant. Founder’s over confidence is insignificantly related with the total comparative and investment returns.
Practical implications – The findings of this study will help the investment managers about the role successful CEOs plays in increasing the investment returns. By following our findings investors can invest in firms with successful CEOs to get higher returns.
Originality/value –This study is an attempt to extend the upper echelon theory by bridging the successful founder characteristics and investment returns of the entrepreneurial firm. For this study, the selection of successful CEOs of entrepreneurial firms and firm location in Silicon Valley provide a useful contribution to the upper echelon theory.


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Author Biographies

Muhammad Haseeb

Faculty of Business and Accountancy, University of Malaya, Malaysia

Ali Awais Khalid

Lahore Business School, University of Lahore, Pakistan

Afaf Mudassar

UCP Business School, University of Central Punjab, Lahore, Pakistan