In 1955, Chairman Mao Zedong proposed that “the countryside is a vast world where much can be done,” which became the slogan of the send-down campaign (also known as the “up to the mountains and down to the countryside” movement). On 22nd December 1968, Chairman Mao Zedong instructed People’s Daily to write an article entitled “We also have two hands, do not idle in the city,” and encouraged the educated youth to move to the countryside and be educated by the rural workers and farmers.

After that, secondary school graduates (who were regarded as educated youth then) were systematically assigned to the countryside. The send-down campaign lasted 25 years and involved a total of about 20 million young people. The movement was mandatory and involved nearly all urban families, thus resulting in a large number of sent-down youths (referred to as “Zhiqing” in Chinese) (Roland and Yang, 2019). The city-bred educated youths across China aged from 14 to early 20s were deprived of opportunities of formal education and sent to the countryside and assigned to live with the peasants to farm for a living. Sent-down youths could not choose whether to go to the countryside or where they would stay. Except for special circumstances, sent-down youths had to toil more than 2 years before they were allowed to join the army, factories, or pursue further education.

Elder and Glen (1986) point out that youth is the most crucial period to form preferences for individuals, and that major events in youth, such as economic and political system changes and macro-economic turbulence, have a lasting impact on the psychological characteristics of the experiencer. As one of the largest and most far-reaching events in modern Chinese history, the send-down campaign greatly influenced the generation born from 1946 to 1961. They were forced to go to remote rural regions and be “re-educated” by farmers from the bottom of society, undergoing harsh manual work and having no idea whether or when they could go back. At an early stage of life, sent-down youths had to leave their families and experience severe poverty, extreme backwardness, and brutal competition for quotas to go back to the city. They had to develop special skills to cope with the challenging living conditions and uncertain future (Shi and Zhang, 2019).

Prior studies have displayed the impact of the Send-down Campaign on individual level and social level not only in a negative tone but also in a positive tone. For example, Liang and Li (2014) investigate the impact of sent-down experience on social trust and find that the degree of distrust of experts and scholars among people with sent-down experience is significantly higher than others. Shi and Zhang (2019) state that the sent-down experience lessens individuals’ participation in politics. However, some studies point out that the sent-down experience also led to some positive side effects. Jia et al. (2018) find that sent-down experience had a positive impact on the experiencer’s college admission test results after the resumption of the college entrance exam because it allowed sent-down youths to develop special cognitive abilities to cope with harsh environments. The youth who were sent away from their families had to develop the skills to adapt to the adversity and uncertain future to survive the forced arrangement out of their control. Chen and Cheng (1999) point out that, for sent-down youths, a spirit of self-striving was developed, which not only helped them overcome the negative impact of the send-down life but also supported them in their career development or social mobility. Their viewpoints are echoed by Chinese general secretary Xi Jinping, who noted in Xi Jinping’s 7-year sent-down life that “When I came to The Yellow Land at the age of 15, I was confused, and when I left the Yellow Land at 22, I had a firm goal in life and full of confidence.”

Although the impact of sent-down experience on individual and social level has been explored, how the traits imprinted by the particular early-life adversity affect strategic decision-making in the firms led by CEOs with sent-down experience is still unknown. In this study, we examine whether CEO sent-down experiences affect firms’ internationalization from the perspective of imprinting theory and upper echelons theory.

Although internationalization helps firms obtain various benefits such as differentiated technological and managerial knowledge and boarder market, the process of internationalization comes with risks. For instance, internationalization not only increases the difficulties of organizational management but also means resource commitment and the challenges of high uncertainty (Hitt et al., 2009). In the field of international business, a lot of research has explored the antecedents of firm internationalization from upper-echelons perspectives. Yet the existing research has mainly explored the impact of top leaders on internationalization strategy from explicit characteristics such as CEO gender (Ng and Sears, 2017) and CEO tenure (Maitland and Sammartino, 2015), limited research has investigated the role of top managers’ psychological traits or early-life experience on the focal firms’ internationalization.

The imprinting theory, which has its roots in biology, suggests that there are “environmentally sensitive periods” in the development of an individual or an organization, in which stage the individual or organization would be impacted significantly by the environment (Pieper et al., 2015; Khan et al., 2020). Marquis and Tilcsik (2013) further claim that the imprinting of a focal actor is the result of multiple sensitive periods and that new imprinting is constantly added on previous imprinting, resulting in a dynamic change. The imprinting theory has become an important perspective that has been widely used in studies on organizational theory, entrepreneurship research, individual career development, etc. (Mathias et al., 2015; Wyrwich et al., 2022). Scholars have conducted studies from different units of analysis, such as individuals, teams, organizations, and industry clusters applying imprinting theory, which represents a theoretical lens to understand the factors influencing individual decisions (Hu et al., 2022).

Imprinting theory proposes that the traits which are formed in early life may last into adulthood. To be specific, there are three elements of imprinting: (1) the focal subject has a sensitive period, typically the founding stage of an organization or the early stage of the individual’s career; (2) the focal subject in the sensitive period will develop the corresponding characteristics to adapt to the environment; (3) these characteristics and abilities will continually affect the focal actor’s decision-making process even if environmental constraints disappear (Marquis and Tilcsik, 2013). China underwent a drastic social transformation after the founding of the country, and a significant number of today’s entrepreneurs and corporate executives experienced the send-down movement at the beginning of their careers. Therefore, the social movement that occurred during their early years would have lasting imprints on their characteristics and values. Then the imprints will manifest in firms they lead according to upper echelons theory.

On the basis of prior studies, we propose that there are two major imprints of the sent-down experiences of senior executives in their sensitive period which are highly relevant to firms’ internationalization. One is the tolerance of uncertainty. In their youth, sent-down youths had barely any control over their future in that political campaign, as it was mandatory for all urban families. They had no idea where they were going to be sent, whether and when they were able to go back to the city (Liu, 2009). The experience forced them to develop the ability to deal with life and work under highly uncertain circumstances, which helped train their tolerance of uncertainty. It is this trait that is the basis of their openness to firm internationalization strategy, as there is always a high level of uncertainty involved in firm internationalization strategy (Tihanyi et al., 2000).

The second major imprint is their self-efficacy in coping with change. At the crucial stage of their growth, the sent-down youths underwent the huge transition from town to countryside, from mental activity to tough manual labor. The tough sent-down experience developed their self-efficacy in dealing with change, leaving a deep imprint on their characteristics and personal values. As noted by Chen and Cheng (1999), “the sent-down youth may be more adaptive, as their unusual experiences probably improved their social skills and increased their political flexibility.” Those sent-down youth who just graduated from middle school had to adapt to the circumstances in those remote areas and integrate into the local community, which was completely different from their previous lives. This sudden change during their youth forced them to develop independent personalities and improve their adaptability to survive and strive for the limited opportunities to return to cities. According to imprinting theory, the characteristics developed in a sensitive period would influence the experiencers’ beliefs and coping styles permanently (Dai et al., 2018). Therefore, CEOs with sent-down experience may exhibit a high tolerance for uncertainty and the self-efficacy to deal with change in their managerial jobs.

Upper echelons theory states that an organization’s actions may reflect the personalities, experiences, and values of its top leaders (Shah et al., 2019). A leader’s coping style and personal values act as filters to analyze complex situations, which therefore influence their strategic choices and corporate outcomes (Finkelstein et al., 2009; Sarfraz et al., 2019; Khan et al., 2021). In the search for strategic opportunities, executive capabilities and coping patterns shaped by their experience matter. Combining the perspective of imprinting theory and upper echelons theory, we infer that CEOs’ tolerance for uncertainty and self-efficacy in coping with change imprinted by their sent-down experience may play an important role in predicting firms led by sent-down CEOs to seek international entrepreneurial opportunities. Therefore, we present the following hypothesis:

Upper echelons theory holds that the effects of top managers on strategic decision-making are not only dependent on their personalities and values but also subject to the decision-makers’ latitude of autonomous action, i.e., the managerial discretion (Li and Tang, 2010). This suggests that it is necessary to incorporate the moderating role of managerial discretion when exploring the relationship between CEO sent-down experience and the internationalization performance of firms led by them. Managerial discretion determines the degree of influence that top managers have on organizational strategies and results, and is subject to various factors within and outside organizations. These are referred to as organizational discretion and institutional discretion respectively in this paper.

The characteristics of the organization itself either inhibit or enhance managerial discretion (Quigley and Hambrick, 2012). Two of the most important factors within an organization that affects managerial discretion are organization inertia and resource slack. The inertial forces within an organization determine the operation mode and the evolutionary path of the enterprise to some extent. The higher level the organization inertia is, the more restraints to initiate strategic changes top managers have. Organization inertia is often manifested in firm age and firm size, as prior studies point out that the larger the organization is and the longer it lives, the more practice it accumulates and the severer the degree of organizational inertia (Lian et al., 2015).

To implement internationalization strategies, the firm needs to commit resources to develop new markets and cope with uncertain situations, so resource slack determines the level of fault tolerance of strategic exploration. Therefore, resource slack is another important factor affecting the managers’ organizational discretion (Wangrow et al., 2015). The more sufficient resources within the organization, the more latitude top managers have, and the higher the possibility for them to engage in international exploration.

If managers are less constrained by organizational inertia or have more disposable organizational resources, the imprint of their early experience will be more reflected in firm internationalization strategy. Thus, we present the following hypotheses:

The institutional environment in which the managers are embedded also affects the managers’ latitude of action (Finkelstein and Hambrick, 1990). The institutional environment of state-owned enterprises (SOEs) and regional institutional ecosystems are the two important factors that affect the institutional discretion of managers (Lian et al., 2015), which determine the latitude of managers’ decision-making externally and affect the ability and freedom of managers to choose internationalization strategies.

For SOEs, their role is not only to achieve economic growth but also to take on some political tasks and social functions, such as providing employment and stability (Chen et al., 2016). These factors cause the government to impose formal and informal institutional constraints on managers of SOEs, which ultimately restrain managerial discretion. In the process of balancing the interests of multiple stakeholders, SOEs are more likely to require managers to ensure the stability of the organization compared to non-SOEs. Therefore, managers of SOEs who intend to implement risky strategies would face more restraints.

The regional institutional environment is also an important element that restrains managerial discretion. As noted by Dai et al. (2019), the maturity of formal systems between regions is extremely uneven. Social trust, government intervention, the level of financial development, judicial justice, and other factors influencing the business environment are varied in different regions of China (Dai et al., 2018), which result in different levels of resource availability. These differences lead to the variation of CEOs’ managerial discretion, depending on where their firms are located. In regions with a better institutional environment, the advantages of high-level government efficiency, policy transparency and better financing availability equip managers with a higher level of managerial discretion. In these circumstances, CEO characteristics manifest themselves more significantly in firm strategies and organization outcomes, including internationalization. Thus, we posit:

Figure 1 shows a theoretical model summarizing the hypotheses.

This paper explores the impact of CEO sent-down experience on firms’ internationalization. We used the China Stock Market and Accounting Research (CSMAR) database, which has been widely used in research on China’s listed firms (Wang and Qian, 2011). Our sample started with all Chinese firms listed on the Shenzhen or Shanghai stock market during 2007–2017. The following processing procedures were performed on the initial data: (1) remove listed companies in the financial and insurance industries following prior research, because these industries are highly regulated in China; (2) remove samples with missing financial and corporate governance data; and (3) winsorize all continuous variables at the 1 and 99% levels to eliminate the effect of extreme outliers. At last, we collect a total of 5,862 firm-year observations during this period. The table of industry-year distribution of the sample can be seen in Appendix A.

To test the hypotheses, we use the following regression models:

Scope_t/Speed_t are dependent variables, that designate firm internationalization performance. Sentdown represents CEO sent-down experience. Moderators include the contingent factors mentioned in the hypotheses, including organization inertia, organization slack, SOE, and regional institutional environment. X_t–1 represents the control variables at time period t-1 as mentioned above. We also include industry fixed effect and year fixed effect. Eq. (1) tests the effect of CEO sent-down experience on firm internationalization performance. Eq. (2) and Eq. (3) test the moderating effect of organization discretion from the perspective of inertia and slack respectively. Eq. (4) and Eq. (5) focus on the moderating effect of institutional discretion from the perspective of SOE and regional institutional environment respectively. The t-statistics (in parentheses) are based on standard errors clustered by firm.

Table 1 presents the descriptive statistics. The mean value of sent-down experience is 6.76%, which indicates that 6.76% of CEOs in the sample have sent-down experience. 30.93% of the sample companies are SOEs.

We present the correlation coefficients in Table 2. Consistent with H1, sent-down experience is positively correlated with international scope and speed respectively (r = 0.297, p < 0.01; r = 0.118, p < 0.01), suggesting that CEO sent-down experience is related to a higher level of internationalization. In addition, Table 2 shows that the correlations among the key variables are not very high, indicating that multi-collinearity should not be a major concern.

The following robust analysis process has been added to enhance the robustness of the results. (1) Considering there may be unobservable factors that affect internationalization on the firm level, we use firm fixed-effects panel regression model to control for firm’s unobserved characteristics. As shown in Column 1–4 Table 7, the regression results show that the effect of CEO sent-down remains significantly positive. (2) We use the chairpersons’ sent-down experience to measure early-life adversity experience. Since the chairperson has more influence on corporate decisions in some Chinese listed companies, we code Sentdown2 as 1 if the chairperson of the board in a sample firm has sent-down experience and 0 otherwise. The results of the retest (Column 5–8 Table 7) show that chairperson’ sent-down experience has a consistent effect on firm internationalization.

To mitigate endogeneity concerns, we use propensity score matching method (PSM) and two-stage Heckman modeling to test the robustness of our findings.

(3) Propensity score matching method. CEOs with sent-down experience may be more likely to join firms with better internationalization performance, thus rendering the potential sample self-selection problem. Following Marquis and Qiao (2018), we conduct a PSM exercise to examine the difference in international performance between firms with and without sent-down experience CEO.

In year t, if a firm has a CEO with sent-down experience (Sentdown = 1), then the firm is in the treatment group, we have 396 firms in the treatment group. The potential control group is drawn from CEO without sent-down experience (Sentdown = 0) in year t. In year t-1, we use all the controlled variables in Model 2 of Table 3 to conduct a one-to-one PSM matching. We label the unmatched group as Group = U, while the matched group as Group = M.

Table 8A reports the differences in the means of the main control variables between the treated and control groups before and after matching. The results indicate that the control variables in the treated and control groups are significantly different before matching, while they are basically indistinguishable after matching, suggesting the efficiency of PSM approach.

We repeat the same regression as in Model 2 and 4 of Table 3 by using the matched sample in Table 8B. The results show that CEO sent-down experience remains significantly positive after the PSM treatment, denoting that the conclusions of our study are not affected by the CEO self-selecting problems. Thus, the result that CEO sent-down experience significantly positively affects the degree of internationalization of the focal firm is robust.

(4) Two-stage Heckman modeling. In the first stage of the analysis, we run a Probit analysis with Sentdown as dependent variable using the instrumental variable and the same control variables as in Column 2 of Table 3. We use the average Sentdown (Average_Sentdown) in the same year and the same industry as the instrumental variable. The logic is that if the specific industry tends to hire CEO with sent-down experience, the firm in the same industry has a higher probability to hire CEO with sent-down experience too. The results are presented in Column 1 of Table 9. The coefficients of Average_Sentdown are positive and significant at the 1% level, which is consistent with our conjecture that when an industry tends to hire a CEO with sent-down experience, the firm in the industry is more likely to do the same.

In the second stage, we calculate the predicted probability of CEO sent-down experience from the fitted values of the Probit model. Then we use this predicted probability to calculate an inverse Mill’s ratio to proxy for the likelihood of hiring a send-down experience CEO, which is indicated in the regression results as “Heckman’s lambda,” We then run the regression of Scope and Speed on lambda and all the control variables in Column 2 of Table 3. The results are presented in Column 2 and 3 of Table 9. The coefficients of lambda are positive as well as significant at the 1% level. The two-stage Heckman model yields qualitatively similar findings to those in Table 3.

Drawing on the imprinting theory and upper echelons theory, we posit the positive effect of CEO early-life adversity experience on corporate internationalization. Using data on a sample of listed companies in China during the period 2007–2017, we obtained the following results. (1) CEO sent-down experience has a significantly positive effect on firm internationalization. (2) The impact of CEO sent-down experience on firm internationalization is stronger when the CEO has a higher level of organizational discretion (i.e., the firm has lower organizational inertia and more organization slack. (3) The positive effect of CEO sent-down experience on firm internationalization is stronger when the CEO has a higher level of institutional discretion (i.e., the firm is a non-SOE or operated in regions of a higher degree of marketization).

Our study makes the following contribution. First, this study extends upper echelons research on the relationship between CEO characteristics and firm strategies and outcomes. While there is extensive literature examining the link between CEO characteristics and firm behaviors and a growing consensus that CEOs’ past experiences in life account for much of the variation in firm strategies and organization outcomes (Bernile et al., 2017; Sarfraz et al., 2020; Khan et al., 2021), largely overlooked is CEO early-life adversity experience. Studies in developmental psychology demonstrate that imprints from early-life experiences can be formative and enduring and manifest in various subsequent decisions (Caspi et al., 2005). Prior studies in management literature have investigated the role of CEO early-life poverty (Xu and Li, 2016), early-life disaster experience (O’Sullivan and Zolotoy, 2021) on firm strategies such as CSR and innovation, yet little is known about the impact of CEO early-life adversity instigated by social disorder. Using the send-down movement in china as the context of individual adversity, we analyze how CEO early-life adversity experience might affect their tolerance of uncertainty and change self-efficacy and then influence firm internationalization performance, enriching the stream of research on how senior executives’ early-life experiences influence firm strategies and outcomes. Although the sent-down experience has its specific historical context, and may not replicate elsewhere, this particular experience is possibly generalizable to any hardship experienced by adolescents that are out of their control. Thus, our study may help understand the role that such adversities, experienced by senior executives, play in firm internationalization, which adds to the research on CEO early-life in echoing the call from O’Sullivan and Zolotoy (2021).

Second, this study contributes to research on the antecedents of firm internalization from the perspective of higher echelons theory. The existing research mainly analyzes the effects of CEOs’ demographic characteristics (Camino Ramon-Llorens et al., 2017) or other explicit traits like CEO firm tenure (Jaw and Lin, 2009) or CEO educational attainment (Camino Ramon-Llorens et al., 2017; Chen Z. H. et al., 2020) on firm internationalization. Although these findings are insightful and help form the belief that CEOs’ experiences can play a significant role in the firm strategy of internationalization, the information revealed by the above-mentioned CEO characteristics can be mixed (for instance, CEO firm tenure can indicate both greater discretion and more inertia with regard to firm internationalization), which may lead to a contradictory effect on firm internationalization. Thus, research directly analyzing the impact of top managers’ early life experience or personalities can advance the research on how senior executives influence firm internationalization (Oesterle et al., 2016). By examining the link between CEO early-life adversity and firm internationalization, our study analyzes the impact of CEOs’ psychological traits imprinted by their early-life adversity and therefore provides a deeper understanding of the role of senior executives in firm internationalization.

Third, this study contributes to the existing studies on the historical event of the send-down movement. Our study examines internationally entrepreneurial exploration of the sent-down generation of entrepreneurs in China, which enriches research on send-down movement. Extant literature has studied the impact of the sent-down experience from historical and sociological perspectives on social trust (Liang and Li, 2014), political participation (Shi and Zhang, 2019), rural education (Chen Y. et al., 2020), etc., but there is little research on the impact of the sent-down experience on leaders at the economic level. This study supplements the stream of research by extending the impact of sent-down experience to firm internationalization performance.

Firm internationalization strategy in emerging economies is important for its sustainable development. Despite many potential benefits of firm internationalization, there is a high level of uncertainty involved in the movement of goods and capital between different countries (Tihanyi et al., 2000). For example, changes in trade policy may pose significant risks to internationally oriented firms, such as the impact of former American President Trump’s protectionist policies and Brexit on the global trade structure, which is beyond managerial control. Therefore, it is critical to select CEOs appropriate to internationalization challenges.

In the executive selection candidates’ previous achievement and relevant experiences are normally highlighted. Yet we suggest that the board of firms intending to pursue international expansion also examine the candidates’ early-life experience when selecting and hiring CEOs as our findings indicate CEOs with early-life adversity experience could better promote firm internationalization. Executives who have overcome early-life adversity may have a higher level of self-efficacy in coping with change and uncertainty, which can be beneficial for leading internationalization explorations. Moreover, the study reveals that with a higher level of organizational and institutional discretion, the positive effect of CEO sent-down experience on firm internationalization performance is stronger. Therefore, enterprises aimed for internationalization may benefit more by conferring managerial discretion to CEOs with early-life adversity experiences to better play the positive effect of their experiences on firm internationalization.

With its theoretical and practical implications, the study has some limitations which should be considered in further research. First, due to data constraints, we did not test whether the mechanism underlying the positive relationship between CEO sent-down experience and firm internationalization performance is their higher level of tolerance of uncertainty and change self-efficacy imprinted by send-down campaign. Future studies may find appropriate methods to test the mechanism. Second, we did not explore the impact of the continuity of sent-down experience on firm internationalization. Although the send-down movements generally affected the urban youth born from 1946 to 1953, the extent varied a lot. Some of them endured the hardship for less than 2 years while others stayed much longer in the remote. It was not clear whether the duration of CEO early-life adversity experience influences the self-efficacy of the experiencers in coping with uncertainty and change, and thus firm internationalization performance. Future research may address these problems to provide a more comprehensive understanding of CEO adversity experience on firm internationalization.