Little Emperor CEOs: Firm risk and performance when CEOs grow up without siblings

Using hand-collected data on the CEOs of Chinese companies, we find that managers who grow up without siblings are associated with riskier firms and worse performance. Our analysis exploits regional and time variation in China's compulsory one-child policy as a shock to fertility rates. Consistent with explanations that only-children have not experienced competition among siblings, we show that firms led by only-child CEOs underperform when industry competition is stronger. Our findings suggest that fertility policies affect the supply of managerial capital and, consequently, corporate policies and performance.