Abstract

http://ssrn.com/abstract=1573167
 
 

References (51)



 
 

Citations (13)



 


 



Corporate Policies of Republican Managers


Irena Hutton


Florida State University - College of Business

Danling Jiang


Florida State University - The College of Business

Alok Kumar


University of Miami - School of Business Administration

March 29, 2013

AFA 2011 Denver Meetings Paper; Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

Abstract:     
We demonstrate that personal political preferences of corporate managers influence corporate policies. Specifically, Republican managers who are likely to have conservative personal ideologies adopt and maintain more conservative corporate policies. Those firms have lower levels of corporate debt, lower capital and R&D expenditures, less risky investments, but higher profitability. Using the 9/11 terrorist attacks and September 2008 Lehman Brothers bankruptcy as natural experiments, we demonstrate that investment policies of Republican managers became more conservative following these exogenous uncertainty increasing events. Further, around CEO turnovers, including CEO death, firm leverage policy becomes more conservative when managerial conservatism increases.

Number of Pages in PDF File: 76

Keywords: Political values, financial conservatism, corporate culture, capital structure, dividend policy, investments

JEL Classification: G31, G32, G35

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Date posted: March 17, 2010 ; Last revised: April 3, 2013

Suggested Citation

Hutton, Irena and Jiang, Danling and Kumar, Alok, Corporate Policies of Republican Managers (March 29, 2013). AFA 2011 Denver Meetings Paper; Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1573167 or http://dx.doi.org/10.2139/ssrn.1573167

Contact Information

Irena Hutton
Florida State University - College of Business ( email )
821 Academic Way
Tallahassee, FL 32306-1110
United States
850.645.1520 (Phone)
Danling Jiang (Contact Author)
Florida State University - The College of Business ( email )
821 Academic Way
P.O. Box 3061110
Tallahassee, FL 32306-1110
United States
(850)645-1519 (Phone)
HOME PAGE: http://mailer.fsu.edu/~djiang/
Alok Kumar
University of Miami - School of Business Administration ( email )
514 Jenkins Building
Department of Finance
Coral Gables, FL 33124-6552
United States
305-284-1882 (Phone)
HOME PAGE: http://moya.bus.miami.edu/~akumar
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