CEO personal experiences and innovation conservatism: Evidence from China

Research question/issue: This paper studies the relationship between chief executive officers' (CEOs) personal experiences and corporate innovation in China. Research findings/insights: We find that CEOs' famine and military experiences adversely impact firm innovation outcomes. In particular, our channel tests show that CEOs with famine experience adversely affect firm innovation by reducing both R&D expenditures and innovation efficiency, whereas CEOs with military experience hinder innovation mainly by reducing research staff. Theoretical/academic implications: Our results imply that innovation conservatism in some firms may be partly explained by individual CEO's early-life personal experiences. Our study thus has broader implications for the differences in management style across corporate executives who go through different experiences. Practitioner/policy implications: Our findings provide important insights for policy makers, suggesting that they should consider CEOs' early-life exposure to different experiences as important “soft information” when evaluating firms' innovation potential for government subsidies.