Firm Partisan Political Positioning, Affective Polarization, and Risk Communication: Examining Firms’ Voluntary Disclosures on COVID-19
55 Pages Posted: 18 May 2020 Last revised: 11 Nov 2020
Date Written: November 8, 2020
COVID-19 is among the most salient issues in the world presently, and for many current executives, it is likely to be among the greatest challenges they will face. Upon entering the U.S. context, the disease was immediately subject to the process of affective polarization, with clear partisan splits forming around perceptions of its risks that did not relate to science. We explore whether firms’ preexisting political positioning affected how they voluntarily disclosed to their investors on a novel, affectively polarized issue by examining whether firms’ disclosure of COVID-19 risks covaries with their partisan political giving. Analyzing conference call and campaign contribution data for the S&P 500, we find a positive association between a firm’s contributions to Democrats and its disclosure of COVID-19 risks.
Keywords: affective polarization; corporate political activity; COVID-19; managerial risk; risk disclosure
JEL Classification: M10
Suggested Citation: Suggested Citation