Famine Experience of Senior Executives and Corporate Debt Financing Cost

Taking the companies in Shanghai and Shenzhen of China from 2001 to 2017 as the research object, this paper investigates the relationship between the early famine experience of senior executives and the corporate debt financing cost, and further tests whether there are significant differences in this impact before and after the implementation of anti-corruption policies, and in different regions of financial development environment. Results show that compared with the companies whose executives have not experienced famine, those companies with famine experience have their debt financing cost significantly reduce. Moreover, the above conclusion is still true after controlling the other characteristics of the executives, the fixed effect of the company level and endogenous problems. Compared with the regions before implementing anti-corruption policy and with lower financial development level, the regions after implementing anti-corruption policy and with higher financial development level have more obvious impact of senior executives’ famine experience on corporate debt financing cost.