All That Is Left to Say: Why Are CEOs Speaking on Social Issues?

63 Pages Posted: 1 Jul 2020

Date Written: June 01, 2020


CEO social activism is increasingly common, but little is known about the motivations and the economic consequences. In this paper, I show that CEO social activism is linked to political polarisation in the US. Social activism is concentrated in states with higher within state political polarisation. I show that Republican-donor CEOs are 88% more likely to speak on social issues with a Democrat-slant. Using a sample of CEO activism events from 2014-2019, I find that CEO activism is associated with a 1.3% increase in firm value and a short-term increase in sales in the next quarter. The gain in firm value and growth in sales are higher for firms selling consumer goods and in highly competitive industries. These results suggest that CEO social activism is motivated by strategic reasons.

Keywords: CEO Activism, Political Contributions, Firm Value, Strategic Extremism

JEL Classification: D21, D82, G32, L21

Suggested Citation

HomRoy, Swarnodeep, All That Is Left to Say: Why Are CEOs Speaking on Social Issues? (June 01, 2020). Available at SSRN:

Swarnodeep HomRoy (Contact Author)

University of Groningen ( email )

Nettlebosje 2
Department of Economics, Econometrics and Finance
Groningen, Groningen 9747 AE

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