The Politics of CEOs

Forthcoming, Journal of Legal Analysis, Volume 11, 2019

Harvard Law School John M. Olin Center Discussion Paper No. 1002

European Corporate Governance Institute (ECGI) - Law Working Paper No. 450/2019

62 Pages Posted: 19 Mar 2019 Last revised: 5 Jun 2019

See all articles by Alma Cohen

Alma Cohen

Tel Aviv University - Eitan Berglas School of Economics; Harvard Law School; National Bureau of Economic Research (NBER)

Moshe Hazan

Tel Aviv University - Eitan Berglas School of Economics; Centre for Economic Policy Research (CEPR)

Roberto Tallarita

Harvard Law School

David Weiss

Tel Aviv University - Eitan Berglas School of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: March 19, 2019

Abstract

CEOs of public companies have influence over the political spending of their firms, which has been attracting significant attention since the Supreme Court decision in Citizens United. Furthermore, the policy views expressed by CEOs receive substantial consideration from policymakers and the public. The political preferences of CEOs, we argue, are therefore important for a full understanding of U.S. policymaking and politics. To contribute to this understanding, we provide empirical evidence on the partisan leanings of public-company CEOs.

We use Federal Election Commission (FEC) records to put together a comprehensive database of the political contributions made by over 3,500 individuals who served as CEOs of S&P 1500 companies during the period 2000-2017. We find that these political contributions display substantial partisan preferences in support of Republican candidates. We identify how this pattern is related to the company’s industry, geographical region, and CEO gender. To highlight the significance of CEO’s partisan preferences for some corporate decisions, we show that public companies led by Republican CEOs tend to be less transparent to investors with respect to their political spending. We conclude by discussing the potential policy implications of our analysis.

Keywords: political spending, political contributions, Republicans, Democrats, CEOs, corporate political influence

JEL Classification: G3, G34, G38, K2, K22

Suggested Citation

Cohen, Alma and Hazan, Moshe and Tallarita, Roberto and Weiss, David, The Politics of CEOs (March 19, 2019). Forthcoming, Journal of Legal Analysis, Volume 11, 2019; Harvard Law School John M. Olin Center Discussion Paper No. 1002; European Corporate Governance Institute (ECGI) - Law Working Paper No. 450/2019. Available at SSRN: https://ssrn.com/abstract=3355690 or http://dx.doi.org/10.2139/ssrn.3355690

Alma Cohen (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

Ramat Aviv, Tel Aviv, 69978
Israel

Harvard Law School ( email )

Cambridge, MA 02138
United States
(617) 496-4099 (Phone)
(617) 812-0554 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Moshe Hazan

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

HOME PAGE: http://moshehazan.weebly.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Roberto Tallarita

Harvard Law School ( email )

1563 Massachusetts Avenue
Cambridge, MA 02138
United States

David Weiss

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

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