How Early Trauma Shapes CEO Risk Appetite for Public Debt Versus Bank Debt
Li, Houjian Li, Yiwei Song, Wei Yang, Haolan
Li, Houjian
Li, Yiwei
Song, Wei
Yang, Haolan
Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2026-02
Journal
Financial Review
Book
Publication Volume
61
Publication Issue
1
Publication Begin page
39
Publication End page
58
Publication Number of pages
Collections
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.
Research Projects
Organizational Units
Journal Issue
Keywords
Chief executive officers, Corporate debt structure, Early-life disaster experience, Imprinting