Political ideology and CEO performance under crisis

Katherine Campbell (), Cullen Goenner, Matthew Notbohm () and Adam Smedema ()
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Katherine Campbell: University of North Dakota
Matthew Notbohm: University of North Dakota
Adam Smedema: University of Wisconsin – Madison

Review of Quantitative Finance and Accounting, 2022, vol. 58, issue 1, No 10, 329-359

Abstract: Abstract Management quality is known to influence depository institution performance, but less understood are the characteristics of managers that influence performance. We empirically examine how the political ideology of a credit union’s CEO influenced decision making and performance during the financial crisis. Our results indicate that the return on assets of credit unions run by conservative CEOs are 22 basis points lower during the crisis relative to liberal CEOs. Returns are shown to be lower as a direct result of credit unions with conservative CEOs applying more conservative accounting practices for loan losses than their counterparts during the crisis, despite similar loan quality.

Keywords: Credit unions; Accounting practices; Performance; Conservatism; Financial crisis (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11156-021-00996-z

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