The Political Polarization of Corporate America

Vyacheslav Fos, Elisabeth Kempf and Margarita Tsoutsoura

No 30183, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Executive teams in U.S. firms are becoming increasingly partisan. We establish this new fact using political affiliations from voter registration records for top executives of S&P 1500 firms between 2008 and 2020. The new fact is explained by both an increasing share of Republican executives and increased assortative matching by executives on political affiliation. Executives who are misaligned with the political majority of their team are more likely to leave the firm, especially in recent years, and their company's stock price responds negatively to the announcement of their departure. Combined, our findings indicate that the increasing political polarization of corporate America may not be in the financial interest of shareholders.

JEL-codes: G3 (search for similar items in EconPapers)
Date: 2022-06
New Economics Papers: this item is included in nep-pol
Note: CF POL
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Citations: View citations in EconPapers (2)

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Working Paper: The Political Polarization of Corporate America (2022)
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