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Top executives’ early‐life experience and financial disclosure quality: impact from the Great Chinese Famine
Author(s) -
Yao Shouyu,
Wang Zhuoqun,
Sun Mengyue,
Liao Jing,
Cheng Feiyang
Publication year - 2020
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12659
Subject(s) - famine , profitability index , business , quality (philosophy) , debt , entertainment , finance , political science , philosophy , epistemology , law
This study investigates the impact of top executives’ Great Chinese Famine experience on firm financial disclosure quality. We find firms led by top executives who experienced the great famine in early life are less likely to conduct fraudulent financial reporting. The famine effect is more pronounced in state‐owned enterprises (SOEs), smaller‐cap, lower‐profitability level firms and firms with weaker external monitoring. Further evidence suggests that top executives with great famine experience show greater tendency to implement secured debt structure, effective internal control and spend less on entertainment and travel costs, which in turn reduce the likelihood of fraudulent financial reporting.