CEO childhood trauma experience and firm internationalization

Abstract

Purpose

The purpose of this study is to examine how the childhood trauma experiences of CEOs influence firms’ internationalization.

Design/methodology/approach

The research used a difference-in-difference method with constructing a treatment group whose chief executive officer (CEO) experienced the great famine in China between the ages of 7 and 11, and a control group whose CEO was born within three years after 1961.

Findings

The study reveals a significant inverse correlation between CEOs’ childhood trauma experiences and firm internationalization. However, this correlation is weaker in the case of state-owned enterprises and firms led by CEOs with overseas work experience.

Originality/value

To the best of the authors’ knowledge, this study is the first to extend the theoretical framework to elucidate firms’ internationalization by introducing childhood trauma theory into the field of international business literature. Second, the authors link the literature on the effect of CEO explicit traits and psychological traits on firm internationalization by exploring how CEOs’ childhood trauma experience shapes their risk aversion, which, in turn, influences firm internationalization. Third, the authors address the call for examining the interplay of CEO life experiences by scrutinizing the moderating effect of CEO overseas work experience on the association between CEOs’ childhood trauma exposure and firm internationalization.

Citation

Du, Y., Xiang, Y. and Ruan, H. (2024), "CEO childhood trauma experience and firm internationalization", Chinese Management Studies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/CMS-08-2023-0421