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Growing up with the one-child policy: CEO early-life experiences and corporate investment in China

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  • Zhu, Ruirui
  • Bo, Hong

Abstract

We examine corporate investment behaviour of Chinese CEOs whose formative years (5–15 years old) overlapped with China’s one-child policy period. We construct alternative measures of CEO early-life experience of gender inequality based on the information on the cities where CEOs lived in their formative years during the one-child policy period. We find that a sample CEO, who experienced greater gender inequality induced by the one-child policy, intends to increase investment, and they invest more than their peers. Moreover, experiencing greater gender inequality, women CEOs are more conservative and risk-averse in investment, and they invest less than their peers. In contrast, men CEOs experiencing greater gender inequality are overconfident and risk-taking in investment, and they invest more than their peers. These results remain robust across a set of tests, including the Generalized Method of Moments (GMM), Difference-In-Difference (DID), and Propensity Score Matching (PSM). We contribute to the debate surrounding China’s one-child policy by providing new evidence on how the one-child policy affects the Chinese economy through its corporate sector.

Suggested Citation

  • Zhu, Ruirui & Bo, Hong, 2023. "Growing up with the one-child policy: CEO early-life experiences and corporate investment in China," Research in International Business and Finance, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s0275531923002003
    DOI: 10.1016/j.ribaf.2023.102074
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    More about this item

    Keywords

    CEO early-life experience; The one-child policy; Gender inequality; Corporate investment;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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