Performance and Managerial Turnover: Evidence from the Career Paths of Film Directors

Using a unique data set that covers the entire career path of film directors (managers) and contains project-specific measures of performance, we examine intertemporal patterns in managerial performance and turnover, and test the implications of job matching theories. We show that turnover is initially high but declines in the number of films (projects) completed. Further, we show that a performance metric constructed from the entire career history is the appropriate measure of re-hiring decisions, superior to a measure based on only the most recent performance. We estimate the marginal contribution of directors to the economic success of their films, and we find that this ability measure is increasing in the number of films made. Similarly, the budget or scale of the project is increasing in directors' experience. Overall, our evidence supports job matching based on continuously updated ability measures. Our findings also extend a larger literature on managerial turnover.