The Origin of Chief Executive Officers and Performance in Hybrid Businesses: The Case of Microfinance

This study examines the relationship between the origin of chief executive officers (CEOs) and performance in hybrid businesses using a sample of 353 microfinance institutions (MFIs) from 76 countries during 1996-2011. The statistical results suggest that MFIs whose CEOs have been recruited internally perform better compared to institutions with externally hired CEOs. The findings are consistent with the view that insider CEOs have firm-specific skills, experience, and network resources that result in enhanced performance in hybrid businesses. Therefore, boards of MFIs searching for a new CEO should look for suitable internal candidates.