CEO early-life experience and corporate accounting conservatism: Insights from the socio-political context
Xutang Liu,
Martin Young and
Jing Liao
Emerging Markets Review, 2024, vol. 63, issue C
Abstract:
Using China's Cultural Revolution as a shock to risk attitude, this study investigates the effect of CEOs' early-life experience on corporate accounting conservatism. We find that CEOs who experienced the Cultural Revolution in their early life are more risk-averse and conservative, and thereby are associated with a higher level of accounting conservatism. Such a positive relationship is more pronounced in provinces with higher political risks, e.g., where the provincial leadership changes and where high-profile provincial bureaucratic corruption cases occur. Also, the positive effect of CEOs' early-life experience is stronger in SOEs where CEOs' political career concerns are more pronounced. Additional analysis suggests that CEOs with early-life Cultural Revolution experience are more likely to adopt conservative accounting practice, such as increasing firm's provisions for liabilities and reducing accrual-based earnings management. Our results add new evidence to support the upper echelons theory and imprinting theory by highlighting the enduring impact of influential socio-political events during early life on the decision-making processes of CEOs.
Keywords: CEO early-life experience; China's Cultural Revolution; Influential political event; Accounting conservatism (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1566014124001109
Full text for ScienceDirect subscribers only
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:63:y:2024:i:c:s1566014124001109
DOI: 10.1016/j.ememar.2024.101215
Access Statistics for this article
Emerging Markets Review is currently edited by Jonathan A. Batten
More articles in Emerging Markets Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().