The past is never dead: Famine-CEOs and corporate social performance

Abstract

Using CEOs' exposure to the Great Chinese Famine (1959–1961) as a measure of early-life trauma in their life (termed, famine-CEOs), we find that firms led by famine-CEOs are associated with lower corporate social responsibility (CSR) performance. Our findings of myriad tests are consistent with the egoism proposition that early-life traumatic experience of human-induced suffering adversely impacts CEOs' social initiatives and willingness to engage in social practices. We also note that the adverse impact of famine-CEOs on CSR is mitigated by CEOs' hometown connection and government ownership while magnified by CEO power. Our results are robust to various econometric methods, alternative explanations, and approaches to address endogeneity concerns such as two-stage least squares, propensity score matching, and the Lewbel procedure. This study shows the importance of considering the influences of CEO early-life experience on non-financial decisions.