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How does CEO famine experience affect corporate labour cost stickiness?

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Listed:
  • Wang, Fangjun
  • Li, Jing
  • Liu, Zenglian
  • Xu, Luying

Abstract

We identify a positive correlation between CEOs' famine experiences and labour cost stickiness, driven by moral-emotional altruism, which is imprinted from their famine experiences. This effect is significant in state-owned enterprises and intensifies with higher CEO power, education levels, and fewer external employment opportunities. The stickiness stems primarily from famine CEOs' lower likelihood of implementing layoffs, rather than a reduced likelihood of decreasing average employee wages when sales decrease, particularly reflecting greater unwillingness to lay off less-educated employees. This study highlights the role of moral-emotional factors in labour cost decisions, filling a gap in understanding beyond efficiency or agency-based explanations.

Suggested Citation

  • Wang, Fangjun & Li, Jing & Liu, Zenglian & Xu, Luying, 2025. "How does CEO famine experience affect corporate labour cost stickiness?," Emerging Markets Review, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:ememar:v:69:y:2025:i:c:s1566014125000962
    DOI: 10.1016/j.ememar.2025.101347
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    References listed on IDEAS

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