IDEAS home Printed from https://ideas.repec.org/a/wly/ijfiec/v29y2024i2p1609-1626.html
   My bibliography  Save this article

The impact of CEOs' early‐life experience on the financialization of non‐financial firms: Evidence from the great Chinese famine

Author

Listed:
  • Zhongchao Wang
  • Shaoni Zhou
  • Yuping Zhou
  • Hao Yang

Abstract

This study investigates whether CEOs' early adverse experience could explain cross‐sectional heterogeneity in the financialization of non‐financial firms. We utilize whether the CEO lived through the Great Chinese Famine as a proxy for the adverse experience. We find that non‐financial firms led by CEOs with such experience are significantly less likely to be involved in financialized activities than those led by CEOs without such experience. Experienced CEOs are prone to develop conservative preference for the short‐term financial assets over long‐term ones. The famine effect is more pronounced in enterprises with less competitive industries, less ownership of controlling shareholders, and non‐Big 4 audit firms. Furthermore, channel tests demonstrate that the famine experience reduces CEO overconfidence and lowers the agency cost of their firms, resulting in a lower financialization level.

Suggested Citation

  • Zhongchao Wang & Shaoni Zhou & Yuping Zhou & Hao Yang, 2024. "The impact of CEOs' early‐life experience on the financialization of non‐financial firms: Evidence from the great Chinese famine," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 1609-1626, April.
    • Handle: RePEc:wly:ijfiec:v:29:y:2024:i:2:p:1609-1626
    DOI: 10.1002/ijfe.2755
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/ijfe.2755
    Download Restriction: no
    File URL: https://libkey.io/10.1002/ijfe.2755?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:ijfiec:v:29:y:2024:i:2:p:1609-1626. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.interscience.wiley.com/jpages/1076-9307/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.