Managerial Style and Attention

Is firm behavior mainly driven by its environment or rather the characteristics of managers? We develop a cognitive theory manager fixed effects, where allocation managerial attention determines behavior. show that in complex environments, endogenous exacerbates effects. Small differences expertise then may result dramatically different behavior, as managers devote scarce way amplifies initial differences. In contrast, less mitigates Firm owners prefer “managers with style” only environments. (JEL D21, D23, G34, M10, M31, M54)