Risk‐averse or altruistic? Board chairs' early‐life experience and debt maturity

Yong Chen, Yun‐Ching Chang and Guan‐Ying Huang

International Review of Finance, 2025, vol. 25, issue 1

Abstract: This study investigates the relationship between board chairs' early‐life experiences during the Great Chinese Famine and the debt maturity choices of Chinese listed firms from 2000 to 2017. The findings reveal that board chairs with famine experience demonstrate a stronger preference for long‐term debt usage. Moreover, these board chairs underestimate future corporate earnings, are less prone to overinvestment, adopt more hedging strategies, and ensure higher‐quality accounting information. The results are particularly pronounced in firms with lower asset redeployability, higher financial distress risk, the absence of political affiliations, non‐state ownership, lower market competition, and heightened economic policy uncertainty. These findings suggest that the observed behavior stems from a risk‐averse orientation rather than altruistic motivations among board chairs with famine experience.

Date: 2025
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International Review of Finance is currently edited by Bruce D. Grundy, Naifu Chen, Ming Huang, Takao Kobayashi and Sheridan Titman

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