Understanding the large productivity differences across firms has been a challenge in economics and management research. Research shows that firms’ management practices explain a significant part of this productivity variation. However, the possible contribution of individual managers is still ill-understood in this respect. In this paper we propose that, next to management practices, leadership behaviors of CEOs are also linked to productivity. For 156 manufacturing firms, we investigate the association of CEO instrumental leadership (IL) behaviors with firm productivity, alongside and also in interaction with firms’ management practices. Our study is among the first to show that CEO leadership behaviors have not only a robust, positive association with productivity, but also that this association is independent of the association between management practices and productivity. With our findings, we contribute to the economics and management literature by providing evidence for the importance of both management practices and the individual manager for firm performance.
