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

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, warexposed 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.