Career concerns and the busy life of the young CEO

We examine how real investment decisions of firms are affected by their CEOs' career concerns. Relative to their older counterparts, younger CEOs are more likely to enter new lines of businesses and exit from existing ones. Younger CEOs undertake bolder expansions and divestments, which lead to significant increases and decreases in firm size, respectively. Younger CEOs also prefer to grow through acquisitions than de novo investments. However, such busier investment style of the younger CEOs appears not to hurt firm efficiency. Additional results also shed light on how CEO favoritism distorts capital allocation within firms.