Cheng Fang, Ruan Wenjuan, Huang Guoliang, Zhang Liangliang
School of Economics and Management, China University of Mining and Technology, Xuzhou, China.
Xuhai College, China University of Mining and Technology, Xuzhou, China.
Front Psychol. 2021 Dec 20;12:816034. doi: 10.3389/fpsyg.2021.816034. eCollection 2021.
This study examines the effect of CEOs' early-life traumatic experience on firm-specific stock price crash risk. Drawing on the idea of natural experiments, we take the Great Famine in China as an external traumatic event which cannot be selected or controlled by human. The analysis points out that compensation psychology and irrational defense psychology after the trauma of Great Famine are important factors that cause CEOs to hoard bad news. Based on a large sample of Chinese companies from 2007 to 2017, we find evidence that CEOs who experienced the Great Famine during early-life tend to hoard bad news, which result in higher stock price crash risk. The more severe and prolonged the Great Famine that the CEOs experienced, the greater the effect of this traumatic experience. CEOs decision-making power enhances the adverse effect of CEOs' early-life traumatic experiences on crash risk. Findings of this study contributes to the literature by providing a new explanation for the stock price crash risk, which is of great significance for the sustained and healthy development of capital markets.
本研究考察了首席执行官（CEO）早年创伤经历对公司特定股价暴跌风险的影响。借鉴自然实验的思路，我们将中国的大饥荒视为一个无法由人类选择或控制的外部创伤事件。分析指出，大饥荒创伤后的补偿心理和非理性防御心理是导致CEO囤积坏消息的重要因素。基于2007年至2017年中国公司的大样本，我们发现有证据表明，早年经历过大饥荒的CEO往往会囤积坏消息，这导致更高的股价暴跌风险。CEO经历的大饥荒越严重、持续时间越长，这种创伤经历的影响就越大。CEO的决策权增强了其早年创伤经历对暴跌风险的不利影响。本研究的发现为股价暴跌风险提供了新的解释，对资本市场的持续健康发展具有重要意义，从而为该文献做出了贡献。
