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Does early-life war exposure of a CEO enhance corporate information transparency?

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  • Choi, Sanghak
  • Jung, Hail

Abstract

This study investigates the relationship between a CEO’s war experience and corporate information transparency. Using the Korean War as an exogenous shock, we find that firms managed by war-exposed CEOs have greater information transparency than firms managed by CEOs who are not war-exposed. Specifically, war-exposed CEOs tend to mitigate information in an asymmetrical fashion as they are more concerned about the potential downside risks. This observation is more pronounced during the global financial crisis. Additionally, war-exposed CEOs who have lived close to the regions where large-scale massacres have occurred seek more information transparency than the CEOs who have lived at a distance from such inhumane experiences. Lastly, we employ regression discontinuity design, propensity score matching, CEO change analysis, and alternative sample regressions to show that the results are not driven by endogeneity concerns.

Suggested Citation

  • Choi, Sanghak & Jung, Hail, 2021. "Does early-life war exposure of a CEO enhance corporate information transparency?," Journal of Business Research, Elsevier, vol. 136(C), pages 198-208.
    • Handle: RePEc:eee:jbrese:v:136:y:2021:i:c:p:198-208
    DOI: 10.1016/j.jbusres.2021.07.019
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    More about this item

    Keywords

    Childhood experience; CEO characteristics; Corporate information transparency;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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