Li, Houjian and Li, Yiwei and Song, Wei and Verousis, Thanos and Yang, Haolan (2025) How Early Trauma Shapes CEO Risk Appetite for Public Debt versus Bank Debt. Financial Review. DOI https://doi.org/10.1111/fire.70008
Li, Houjian and Li, Yiwei and Song, Wei and Verousis, Thanos and Yang, Haolan (2025) How Early Trauma Shapes CEO Risk Appetite for Public Debt versus Bank Debt. Financial Review. DOI https://doi.org/10.1111/fire.70008
Li, Houjian and Li, Yiwei and Song, Wei and Verousis, Thanos and Yang, Haolan (2025) How Early Trauma Shapes CEO Risk Appetite for Public Debt versus Bank Debt. Financial Review. DOI https://doi.org/10.1111/fire.70008
Abstract
This study examines the impact of CEOs’ early disaster experiences on the choice of debt structure. We find that firms led by CEOs who have endured disasters are more inclined to shift from bank debt to public debt. This evidence remains robust across various alternative measures, empirical specifications, and identification tests aimed at mitigating endogeneity. The effect of CEOs’ early disaster experiences is more pronounced under specific institutional conditions. The effect strengthens with stricter regulatory oversight and lower unemployment risk, suggesting that institutional environments shape how personal experiences manifest in financial decisions. Overall, these findings suggest that the CEOs' inclination, shaped by early disasters, to take additional risk and seek greater autonomy, can have significant effects on corporate debt structure.
Item Type: | Article |
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Uncontrolled Keywords: | chief executive officers; corporate debt structure; early-life disaster experience; imprinting |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School Faculty of Social Sciences > Essex Business School > Essex Finance Centre |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 28 Jul 2025 16:15 |
Last Modified: | 28 Jul 2025 16:16 |
URI: | http://repository.essex.ac.uk/id/eprint/41167 |
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