CEO political ideology and voluntary forward-looking disclosure

Forthcoming, Journal of Financial and Quantitative Analysis

96 Pages Posted: 21 Jul 2020 Last revised: 4 Mar 2024

See all articles by Ahmed Elnahas

Ahmed Elnahas

The University of Texas Rio Grande Valley

Lei Gao

George Mason University

Md Noman Hossain

Central Washington University - College of Business

Jeong-Bon Kim

Simon Fraser University; City University of Hong Kong

Date Written: June 28, 2020

Abstract

This study investigates whether and, if so, how the information disclosure preferences differ systematically between Republican CEOs and Democrat CEOs in the context of management earnings forecasts. We find that Republican CEOs tend to prefer a less asymmetric information environment than Democrat CEOs, and thus make more frequent, timelier, and more accurate disclosures than Democrat CEOs. Results using the propensity score matched sample and the difference-in-differences analysis show that our results are unlikely to be driven by potential endogeneity. Our results are robust to controlling for various CEO characteristics, including personal characteristics, compensation incentives, overconfidence, and managerial ability, and are stronger for firms with higher levels of institutional ownership and litigation risk.

Keywords: CEO Political Ideology; Management Earnings Forecasts; Conservatism; Information disclosure; Republican versus Democrat.

JEL Classification: D82, M41, P16, G34, G40

Suggested Citation

Elnahas, Ahmed and Gao, Lei and Hossain, Md Noman and Kim, Jeong-Bon, CEO political ideology and voluntary forward-looking disclosure (June 28, 2020). Forthcoming, Journal of Financial and Quantitative Analysis, Available at SSRN: https://ssrn.com/abstract=3637608 or http://dx.doi.org/10.2139/ssrn.3637608

Ahmed Elnahas

The University of Texas Rio Grande Valley ( email )

1201 W. University Dr.
College of Business and Entrep
Edinburg, TX 78539
United States

Lei Gao

George Mason University ( email )

Fairfax, VA 22030
United States

HOME PAGE: http://sites.google.com/view/lei-gao/home

Md Noman Hossain (Contact Author)

Central Washington University - College of Business ( email )

Ellensburg, WA 98926
United States

Jeong-Bon Kim

Simon Fraser University ( email )

8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada

City University of Hong Kong ( email )

Department of Accountancy
83 Tat Chee Avenue
Kowloon Tong
Hong Kong
852-3442-7909 (Phone)

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