Founder-CEOs and Firm Value: Evidence from Performance, Returns, and Investment Behavior in U.S. Firms

Abstract

This thesis examines whether founder-CEO leadership is associated with differences in firm valuation, stock returns, and investment behavior among US-listed firms. Using a panel of 1,578 firms between 2010 and 2024, we identify founder-CEOs from SEC filings and estimate a series of OLS regressions with firm, industry, and time fixed effects. We find that founder-led firms exhibit significantly higher Tobin's Q across all specifications, including the within-firm specification. In contrast, the evidence does not support a founder-CEO return premium. Although founder-led firms earn higher returns in the baseline model, the sign reverses once firm characteristics and fixed effects are introduced, and the effect is at most marginally significant. Founder-led firms also invest more in R&D, while differences in CAPEX are limited and inconsistent. The results suggest that founder leadership is reflected in higher market valuation and a stronger emphasis on innovation-oriented investment, but not in systematically higher stock returns.