Imperial College London

Dr Claudia Custodio

Business School

Associate Professor of Finance
 
 
 
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Contact

 

+44 (0)20 7594 9249c.custodio Website CV

 
 
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Location

 

4.0953 Prince's GateSouth Kensington Campus

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Summary

 

Publications

Publication Type
Year
to

9 results found

Custodio C, Albuquerque A, Cvijanovic D, Bennett Bet al., 2022, CEO Compensation and real estate prices: pay for luck or pay for action?, Review of Accounting Studies, ISSN: 1380-6653

This paper uses variation in real estate prices to study CEO pay for luck. We distinguish between pay forluck and pay for responding to luck (action) by exploiting US GAAP accounting rules, which mandatethat real estate used in the firm’s operations is not marked-to-market. This setting allows us to empiricallydisentangle pay for luck from pay for action, as a change in the value of real estate is only accounted forwhen the CEO responds to changes in property value. We show that CEO compensation is associated withthe following two managerial responses to changes in real estate values: (i) real estate sales and (ii) debtissuance. Overall, we show that CEOs are rewarded for taking value enhancing actions in response to luck.

Journal article

Custodio C, Siegel S, 2020, Are chief executive officers more likely to be first-borns?, PLoS One, Vol: 15, ISSN: 1932-6203

We investigate the link between birth order and the career outcome of becoming Chief Executive Officer (CEO) of a company. CEOs are more likely to be the first-born, i.e., oldest, child of their family relative to what one would expect if birth order did not matter for career outcomes. Both male and female CEOs are more likely to be first-born. However, the first-born advantage seems to largely reflect the absence of an older brother, but not of an older sister. These results are more pronounced for family firms, where traditionally the oldest child is appointed to run the family business, but also hold for non-family firms.

Journal article

Perdigao Dias Custodio C, Ferreira M, Matos P, 2019, Do general managerial skills spur innovation?, Management Science, Vol: 65, Pages: 459-476, ISSN: 1526-5501

We show that firms with chief executive officers (CEOs) who gain general managerial skills over their lifetime of work experience produce more patents. We address the potential endogenous CEO–firm matching bias using firm–CEO fixed effects and variation in the enforceability of noncompete agreements across states and over time during the CEO’s career. Our findings suggest that generalist CEOs spur innovation because they acquire knowledge beyond the firm’s current technological domain, and they have skills that can be applied elsewhere should innovation projects fail. We conclude that an efficient labor market for executives can promote innovation by providing a mechanism of tolerance for failure.

Journal article

Custodio C, Siegel S, 2018, Are CEOs More Likely to be First-Borns?, Publisher: CEPR

We investigate the link between birth order and the career outcome of becoming Chief Executive Officer (CEO) of a company. CEOs are more likely to be the first-born, i.e., oldest, child of their family relative to what one would expect if birth order did not matter for career outcomes. Both male and female CEOs are more likely to be first-born. However, the first-born advantage seems to largely reflect the absence of an older brother, but not of an older sister. These results are more pronounced for family firms, where traditionally the oldest child is appointed to run the family business, but also hold for non-family firms.

Working paper

Custodio C, Metzger D, 2014, Financial expert CEOs: CEO's work experience and firm's financial policies, Journal of Financial Economics, Vol: 114, Pages: 125-154, ISSN: 0304-405X

We study CEOs with a career background in finance. Firms with financial expert CEOs hold less cash, more debt, and engage in more share repurchases. Financial expert CEOs are more financially sophisticated: they are less likely to use one companywide discount rate instead of a project-specific one, they manage financial policies more actively, and their firm investments are less sensitive to cash flows. Financial expert CEOs are able to raise external funds even when credit conditions are tight, and they were more responsive to the dividend and capital gains tax cuts in 2003. Analyzing CEO-firm matching based on financial experience, we find that financial expert CEOs tend to be hired by more mature firms. Our results are consistent with employment histories of CEOs being relevant for corporate policies. However, we cannot formally rule out that our findings are partly explained by endogenous CEO-firm matching.

Journal article

Custodio C, 2014, Mergers and acquisitions accounting and the diversification discount, The Journal of Finance, Vol: 69, Pages: 219-240, ISSN: 0022-1082

q‐based measures of the diversification discount are biased upward by mergers and acquisitions and its accounting implications. Under purchase accounting, acquired assets are reported at their transaction value, which typically exceeds the target's pre‐merger book value. Thus, measured q tends to be lower for the merged firm than for the portfolio of pre‐merger entities. Because conglomerates are more acquisitive than focused firms, their q tends to be lower. To mitigate this bias, I subtract goodwill from the book value of assets and a substantial part of the diversification discount is eliminated. Market‐to‐sales‐based measures do not have this bias.

Journal article

Custodio C, Metzger D, 2013, How Do CEOs Matter? The Effect of Industry Expertise on Acquisition Returns, REVIEW OF FINANCIAL STUDIES, Vol: 26, Pages: 2007-2047, ISSN: 0893-9454

Journal article

Custodio C, Ferreira MA, Matos P, 2013, Generalists versus specialists: Lifetime work experience and chief executive officer pay, JOURNAL OF FINANCIAL ECONOMICS, Vol: 108, Pages: 471-492, ISSN: 0304-405X

Journal article

Custodio C, Ferreira MA, Laureano L, 2013, Why are US firms using more short-term debt?, JOURNAL OF FINANCIAL ECONOMICS, Vol: 108, Pages: 182-212, ISSN: 0304-405X

Journal article

This data is extracted from the Web of Science and reproduced under a licence from Thomson Reuters. You may not copy or re-distribute this data in whole or in part without the written consent of the Science business of Thomson Reuters.

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