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Military executives and corporate outcomes: Evidence from China

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  • Lin, Lin
  • Nguyen, Nhut Hoang
  • Young, Martin
  • Zou, Liping
Abstract
This study investigates the impact of executives' military experience on corporate outcomes in China. We find that firms with military executives take higher financial leverage and underperform their non-military counterparts, although they perform relatively better during periods of industry distress. Our results are robust when using propensity score matching and instrumental variable approaches. Interestingly, military executives in China commit relatively more corporate violations compared to those without military experience. This finding differs to the findings of Benmelech and Frydman (2015) for U.S. military CEOs, where there are clear differences in culture, education background, and ethical behaviours as compared with China.

Suggested Citation

  • Lin, Lin & Nguyen, Nhut Hoang & Young, Martin & Zou, Liping, 2021. "Military executives and corporate outcomes: Evidence from China," Emerging Markets Review, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:ememar:v:49:y:2021:i:c:s1566014120302697
    DOI: 10.1016/j.ememar.2020.100765
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    Cited by:

    1. Yeoh, Siew-Boey & Hooy, Chee-Wooi, 2024. "Is the military CEO aggressive or conservative? Differences in legal and cultural factors around the world," Research in International Business and Finance, Elsevier, vol. 70(PA).
    2. Tasawar Nawaz & Roszaini Haniffa & Mohammad Hudaib, 2023. "From boots to suits: do military directors protect shareholders’ wealth?," Review of Quantitative Finance and Accounting, Springer, vol. 61(4), pages 1479-1511, November.
    3. Liu, Xianda & Hou, Wenxuan & Main, Brian G.M., 2024. "Military experience and subsequent effectiveness as a director," Journal of Economic Behavior & Organization, Elsevier, vol. 222(C), pages 144-176.
    4. Yaping Wang & Mengting Zhang, 2024. "How Military Executives Shape Digital Transformation of Firms—The Moderating Role of Symbiosis Orientation and Market Power," Sustainability, MDPI, vol. 16(12), pages 1-17, June.

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    Keywords

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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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