CEOs’ experience of the Great Chinese Famine and accounting conservatism
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Long, Wenbin
Tian, Gary Gang
Yao, Daifei (Troy)
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Abstract
This study investigates how a CEO's early-life experience of the Great Chinese Famine affects corporate accounting conservatism. We find that companies whose CEOs had experienced famines in early life adopted more conservative accounting policies. This famine experience effect is more pronounced in high uncertainty environments proxied by non-SOEs, politician turnovers and the adoption of International Financial Reporting Standards (IFRS). Additional tests indicate that CEOs with famine experience tend to support conservative accounting practices for contingencies and accelerate the recognition of asset impairments in negative events. Overall, consistent with imprinting theory, our results highlight the role of early-life traumatic experiences in shaping CEOs’ risk preferences and financial reporting policies.
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Journal of Business Finance & Accounting
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47
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9-Oct
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© 2020 John Wiley & Sons Ltd. This is the peer reviewed version of the following article: Hu, J; Long, W; Tian, GG; Yao, D, CEOs’ experience of the Great Chinese Famine and accounting conservatism, Journal of Business Finance & Accounting, 2020, 47 (9-10), pp. 1089-1112, which has been published in final form at https://doi.org/10.1111/jbfa.12485. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
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Accounting, auditing and accountability
Banking, finance and investment
Social Sciences
Business, Finance
Business & Economics
accounting conservatism
CEO behavior
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Hu, J; Long, W; Tian, GG; Yao, D, CEOs’ experience of the Great Chinese Famine and accounting conservatism, Journal of Business Finance & Accounting, 2020, 47 (9-10), pp. 1089-1112