Top executives’ great famine experience and stock price crash risk

Abstract

Using Chinese stock market data, we examine the impact of top executives’ great famine experience on stock price crash risk. We provide insights on the consequences of early-life disaster experience and the underlying mechanisms through which top executives’ famine experience affects crash risk. Evidence shows that, firms led by top executives who experienced the great famine in early-life have lower stock price crash risk. In addition, these firms have higher information transparency and lower information risk, which ultimately reduce the future stock price crash risk. And the effect varies with top executives’ growth stage, firm characteristics, and external monitoring.