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Early-life experience and CEOs’ reactions to COVID-19

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  • Ru, Hong
  • Yang, Endong
  • Zou, Kunru

Abstract

This study investigates how CEOs' experience of natural disasters and severe disease outbreaks in their formative years influences their firms' responses to the COVID-19 pandemic in the United States. We observe that firms whose CEOs experienced disease outbreaks akin to COVID-19 early in their lives demonstrated more conservative responses to the emergence of the COVID-19 in late February 2020, notably through a substantial slowdown in capital expenditure growth. Moreover, firms led by CEOs with early-life disease experience exhibit a more negative tone in their corporate disclosures and heightened pessimism in their earnings forecasts following the COVID-19 outbreak. These effects are more pronounced for firms in industries that were hit hard by the pandemic. Our findings suggest that severe events early in life leave indelible imprints on memory, thereby impacting CEOs’ decision-making when managing similar crises in their professional careers.

Suggested Citation

  • Ru, Hong & Yang, Endong & Zou, Kunru, 2025. "Early-life experience and CEOs’ reactions to COVID-19," Journal of Accounting and Economics, Elsevier, vol. 79(1).
    • Handle: RePEc:eee:jaecon:v:79:y:2025:i:1:s0165410124000648
    DOI: 10.1016/j.jacceco.2024.101734
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    More about this item

    Keywords

    Early-life experience; Corporate disclosure; Management style; COVID-19;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • I1 - Health, Education, and Welfare - - Health

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