This article investigates the relationship between CEOs＇ early-life experience and firms＇ investment behavior, which includes firms＇ investment level and investment efficiency, it also takes the system of China into consideration,dividing all the company into two subsample ,which are the state-owned-enterprises （SOEs） and the non-state-owned-enterprises （NSOEs）. And this paper based on the research about CEOs＇ early experience of the Chinese Famine in 1959-1961.
Firstly, we analyze the related theory from the angle of psychology, which indicates that the early-life experience will affect one＇ s behavior in the latter period persistently, especially the bad experience in the childhood. A lot of papers in psychology filed found that the disaster experience, like earthquake and famine, will affect people＇ s sentiments and thought, change their cognition of risk. People who experienced the disaster in their early life will show strong risk aversion and more cautious behavior in their latter period. So if a CEO experienced a disaster in his early life, his financial policy and financial behavior may be affected by that and then have some difference with others, especially the investment behavior, both investment level and investment efficiency. And also, the association maybe have some difference in different companies, like between SOEs and NSOEs.
In order to examine these hypotheses,we chose the Chinese Famine in 1959-1961 （the 3-Years＇ Famine） as the disaster experience to have a research. Then we use the data of Chinese public companies which collected from CSMAR and WIND to examine the association between CEOs＇ early experience of the 3-Years＇ Famine and firms＇ investment level, the result of the test is significant at 1% level even after controlling the whole related variables, however,there＇s a difference between the state-owned-enterprises （SOEs） and the non-state-owned-enterprises （NSOEs）, the NSOEs＇ empirical test is significant at i % level as well, but the result of SOEs＇ empirical test is insignificant. These results show that CEOs who grew up during the 3-Years＇ Famine have a lower investment level. Then we examine the association between CEOs＇ early experience of the 3-Years＇ Famine and firms＇ investment efficiency, similarly, after controlling the whole related variables ,the empirical test is significant at 5% level, there＇ s also a difference between SOEs and NSOEs, the latter is significant which the former is not, and these resuits indicate that CEOs who grew up during the 3-Years＇ Famine have a worse investment efficiency, they are more likely to have an underinvestment behavior.
And then, this paper has a further research to explore whether the extent of a disaster will affects the association we examine before or not？ We use average death rate in 1959--1961 as the proxy variable of the extent of the disaster, the death rate of one region is higher, which means the disaster＇ s extent in that region is more serious. So, we use a subsample of the death rate of different regions in China to examine whether the extent of the disaster will affect the influence of the early experience on firm＇ s investment behavior or not. And the results of subsample discover that within the CEOs who experience the 3-Years＇ Famine, the firms＇ investment level is lower if the famine of the CEOs＇ hometown is more serious.
At last, this paper use four different methods to test the robust of the conclusion of this paper, and all the resuits of the robust tests are basically the same as the empirical tests before. So, we can conclude that CEOs who grew up during the 3-Years＇ Famine have a lower investment level and their investment efficiency are worse, they are more likely to have a behavior of underinvestment, especially for the NSOEs. And the further research indicates that the extent of the disaster could adjusts the association of CEOs＇ early experience and firms＇ investment behavior.