Great Chinese famine, corporate social responsibility and firm value

Cheng Xu, Jun Gao, Xinghe Liu*, Yangi Sun, Kees Koedijk

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


We conceptualize that CEOs who endure traumatic experiences stemming from man-made disasters practice less corporate social responsibility. We exploit a natural experiment—the Great Chinese Famine—to empirically test this hypothesis. We find that (i) firms with CEOs who experienced the Great Chinese Famine score lower in corporate social responsibility ratings than a comparison group; (ii) this relationship is mainly driven by prosocial practices tied to employee relations, environmental protection, supplier relations, and community contributions; and (iii) this negative relationship is more pronounced in firms whose CEOs were younger when they experienced the famine, (iv) the positive relationship between CSR scores and firm value is more pronounced in firms with CEO without famine experiences. These results are robust in the face of several sources of endogeneity. Our study contributes to ongoing research regarding how top executives' early experiences affect their managerial decisions. It also enriches work surrounding corporate social responsibility and the plausibly exogenous determinants of prosocial preferences.
Original languageEnglish
Number of pages25
JournalPacific Basin Finance Journal
Publication statusPublished - Jun 2023


  • Corporate social responsibility
  • Behavioral corporate finance
  • Managers
  • Corporate decisions
  • Corporate governance


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