Stockholm School of Economics Asia Working Paper Series
Xunan Feng and Anders C. Johansson
Living through the Great Chinese Famine: Early-Life Experiences and Managerial Decisions
Abstract: Previous studies have linked personal characteristics of
business leaders to corporate decisions. We analyze if the traumatic
experience of the Chinese Famine had an impact on managerial decisions.
Having lived through the famine is associated with more conservative
financial, investment, and cash holding policies, a lower likelihood of
unethical behavior, and better firm performance during economic downturns.
By exploiting the exogenous variation in local severity of the famine, we
establish a causal relationship between early-life experiences and
corporate policies. Our findings thus provide evidence that momentous
personal experiences can have important causal effects on managerial
Keywords: Corporate decisions; Fraud; Ethics; Corporate governance; China; (follow links to similar papers)
JEL-Codes: D03; D83; D84; G11; G31; G32; J24; (follow links to similar papers)
63 pages, November 1, 2016
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