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

See all articles by Richard Benton

Richard Benton

University of Illinois

J. Adam Cobb

University of Texas at Austin - Red McCombs School of Business

Timothy Werner

University of Texas at Austin - Red McCombs School of Business

Date Written: November 8, 2020

Abstract

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

Benton, Richard and Cobb, J. Adam and Werner, Timothy, Firm Partisan Political Positioning, Affective Polarization, and Risk Communication: Examining Firms’ Voluntary Disclosures on COVID-19 (November 8, 2020). Available at SSRN: https://ssrn.com/abstract=3601209 or http://dx.doi.org/10.2139/ssrn.3601209

Richard Benton (Contact Author)

University of Illinois ( email )

504 East Armory Avenue
Champaign, IL 61820-6297
United States

J. Adam Cobb

University of Texas at Austin - Red McCombs School of Business ( email )

2110 Speedway, B6000
Austin, TX 78705
United States

Timothy Werner

University of Texas at Austin - Red McCombs School of Business ( email )

United States
5122326844 (Phone)

HOME PAGE: http://timothywerner.com

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
105
Abstract Views
1,656
rank
327,955
PlumX Metrics