Political euphoria and corporate disclosures: An investigation of CEO partisan alignment with the president of the United States

Mazhar Arikan, Mehmet Kara, Adi Masli and Yaoyi Xi

Journal of Accounting and Economics, 2023, vol. 75, issue 2

Abstract: We examine how the partisan alignment between chief executive officers (CEOs) and the United States president influences corporate disclosure outcomes. We predict and find evidence that more partisan-aligned CEOs display greater optimism in their corporate disclosures. CEO partisan alignment is positively associated with the likelihood of issuing a management earnings forecast and issuing overly optimistic forecasts. More partisan-aligned CEOs also use a more optimistic tone in the corporate disclosure and exhibit a lower level of accounting conservatism. Our findings suggest that time-varying beliefs of CEOs formed by the political environment can shape corporate disclosures.

Keywords: Partisan alignment; Political ideology; Corporate disclosure (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:75:y:2023:i:2:s0165410122000751

DOI: 10.1016/j.jacceco.2022.101552

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