Risk-averse or altruistic? Board chairs' early-life experience and debt maturity

Abstract

This study investigates the relationship between board chairs' early-life experiences during the Great Chinese Famine and the debt maturity choices of Chinese listed firms from 2000 to 2017. The findings reveal that board chairs with famine experience demonstrate a stronger preference for long-term debt usage. Moreover, these board chairs underestimate future corporate earnings, are less prone to overinvestment, adopt more hedging strategies, and ensure higher-quality accounting information. The results are particularly pronounced in firms with lower asset redeployability, higher financial distress risk, the absence of political affiliations, non-state ownership, lower market competition, and heightened economic policy uncertainty. These findings suggest that the observed behavior stems from a risk-averse orientation rather than altruistic motivations among board chairs with famine experience.