When the Presidential Candidate Comes to Town: The Impact of Donald J. Trump’s Campaign Rallies on Local Firms’ Environmental and Social Performance

Feng Guo (), Yonghong Liu, Mengmeng Wang and Yiyang Zhang
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Feng Guo: Iowa State University
Yonghong Liu: University of North Carolina at Greensboro
Mengmeng Wang: University of North Carolina at Greensboro
Yiyang Zhang: Youngstown State University

Journal of Business Ethics, 2023, vol. 186, issue 3, No 4, 552 pages

Abstract: Abstract This study investigates how the explicitly anti-prosocial and anti-pro-environmental speech by political elites affects firms’ environmental and social (E&S) performance. Using the case of the Donald J. Trump (DJT) campaign for president in the United States when he gave out controversial and inflammatory remarks, including those regarding E&S issues, we find that local firms’ E&S performance decreased significantly in the year following DJT’s presidential campaign rally compared with firms in other geographic areas where there was no DJT’s presidential campaign event. A further test indicates that the change in firms’ E&S performance can be driven by DJT remarks’ influence on local social norms shift. Furthermore, we show that the post-rally decrease of local firms’ E&S performance is more pronounced for local firms that operate primarily locally or local firms that are more sensitive to political uncertainty. Taken together, these findings indicate that political events such as political elites giving remarks can affect firms’ E&S performance.

Keywords: Corporate environment and social performance; Social norms; Political campaign (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10551-022-05212-z

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