Indelible imprint: CEOs’ poverty experience and corporate labor income share

Liang Wang, Jun Hu, Daifei Yao and Miroslaw J. Skibniewski

Journal of Business Research, 2025, vol. 199, issue C

Abstract: This study examines the impact of CEOs’ poverty experiences on firms’ labor income share. Using a manually compiled dataset that matches the birthplaces of CEOs with poverty-stricken counties in China, we find that firms led by CEOs with poverty experience have a considerably higher labor income share. This effect is stronger for firms located in CEOs’ hometowns, labor-intensive firms, and CEOs with higher educational attainment. Further analysis reveals that CEO poverty experience increases labor income share through self-restraint in expenses (reducing discretionary managerial costs) and investment in employees (enhancing wages, benefits, and training programs). Our findings support imprinting theory and distributive justice theory, suggesting that early-life adversity leaves a lasting effect on CEOs’ decision-making, thereby influencing corporate resource allocation and employee welfare policies.

Keywords: CEOs’ poverty experience; Labor income share; Imprinting theory; Distributive justice theory (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:199:y:2025:i:c:s0148296325003625

DOI: 10.1016/j.jbusres.2025.115539

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