Are Judges Like Umpires? Political Affiliation and Corporate Prosecutions

44 Pages Posted: 28 Jan 2020

See all articles by Todd A. Gormley

Todd A. Gormley

Washington University in St. Louis

Mahsa Kaviani

Temple University - Department of Finance

Hosein Maleki

Temple University, Fox School of Business

Date Written: January 3, 2020

Abstract

Using the random assignment of judges to corporate criminal cases, we document that, on average, judges appointed by a Democrat president impose larger monetary damages for crimes that Democrats are more likely to view as important (i.e., violations of environmental and labor regulations) while Republican-appointed judges impose larger fines for crimes that Republicans are more likely to view as important (i.e., the hiring of illegal immigrants). These differences are amplified during time periods of greater political partisanship and are robust to controlling for other judicial characteristics (e.g., age, race, and gender). There is no evidence, however, that judges’ political affiliations are associated with decisions on guilt. The findings suggest that shifts in judicial political affiliations and increased political polarization have the potential to affect firms’ investment and hiring decisions.

Keywords: corporate crime, judges, politics, bias

JEL Classification: G38, K14, K42

Suggested Citation

Gormley, Todd A. and Kaviani, Mahsa and Maleki, Hosein, Are Judges Like Umpires? Political Affiliation and Corporate Prosecutions (January 3, 2020). Available at SSRN: https://ssrn.com/abstract=3513177 or http://dx.doi.org/10.2139/ssrn.3513177

Todd A. Gormley (Contact Author)

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
(314) 935-7171 (Phone)

HOME PAGE: http://www.gormley.info

Mahsa Kaviani

Temple University - Department of Finance ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

Hosein Maleki

Temple University, Fox School of Business ( email )

Philadelphia, PA 19122
United States

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