Strategic CEO activism in polarized markets
Strategic CEO activism in polarized markets
In this paper we show that statements of US CEOs on contentious social issues are not necessarily an expression of their political views. Republican-donor CEOs are three-times more likely to make social statements with a liberal-slant. CEO activism is more likely if firms' operating environment is politically polarized, and employees are Democrat-leaning. Such statements are associated with a 3% increase in consumer visits to a firm's Democrat county stores without significantly reducing them in Republican counties. CEO activism is associated with a 0.12% gain in firm value, increased quarterly sales, and a reduced likelihood of shareholder activism on social issues.
Homroy, Swarnodeep
bf9526ca-76e9-4d1f-8b8e-0be867b684f1
Gangopadhyay, Shubhashis
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Homroy, Swarnodeep
bf9526ca-76e9-4d1f-8b8e-0be867b684f1
Gangopadhyay, Shubhashis
97f05806-e08f-4e93-85e5-a7791cddd08c
Homroy, Swarnodeep and Gangopadhyay, Shubhashis
(2023)
Strategic CEO activism in polarized markets.
Journal of Financial and Quantitative Analysis.
(doi:10.1017/S0022109023001382).
Abstract
In this paper we show that statements of US CEOs on contentious social issues are not necessarily an expression of their political views. Republican-donor CEOs are three-times more likely to make social statements with a liberal-slant. CEO activism is more likely if firms' operating environment is politically polarized, and employees are Democrat-leaning. Such statements are associated with a 3% increase in consumer visits to a firm's Democrat county stores without significantly reducing them in Republican counties. CEO activism is associated with a 0.12% gain in firm value, increased quarterly sales, and a reduced likelihood of shareholder activism on social issues.
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strategic-ceo-activism-in-polarized-markets
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e-pub ahead of print date: 5 December 2023
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Local EPrints ID: 499359
URI: http://eprints.soton.ac.uk/id/eprint/499359
ISSN: 0022-1090
PURE UUID: 8ba6982b-199f-4a13-b8dd-5e7e0aeafc03
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Date deposited: 18 Mar 2025 17:30
Last modified: 22 Aug 2025 02:47
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Author:
Swarnodeep Homroy
Author:
Shubhashis Gangopadhyay
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