Leadership and Productivity : Do Leaders’ Traits Matter?

We examine the effect of top leader teams’ (TLT) traits on productivity using provincial level data in China over the period 1995-2015. Applying a difference-in-difference approach, we find significant causative leadership effects on productivity. In particular, TLTs’ education level and quality, career ambition, and political connections have a negative effect on productivity, while previous work experience improves productivity. These results are consistent with TLT’s policy choices that are strongly correlated with TLT’s traits. Not surprisingly, the majority of TLTs make fewer efforts on productivity improvement but strive for short-term GDP growth, which very possibly be driven by career concerns under the political rewarding system in China