CEO Political Leanings and Store-Level Economic Activity during the COVID-19 Crisis: Effects on Shareholder Value and Public Health
64 Pages Posted: 16 Aug 2020 Last revised: 30 Aug 2022
Date Written: July 22, 2022
Abstract
Maintaining economic output during the COVID-19 pandemic results in benefits for firm shareholders but comes at a potential cost to public health. Using store-level data, we examine how a CEO’s political leaning impacts this trade-off. We document that firms with a Republican-leaning CEO experience a relative increase in store visits compared to firms with a Democratic-leaning CEO. The increase in store visits is associated with higher sales and positive abnormal stock returns. However, we also document higher COVID-19 transmission rates and more employee safety complaints in communities where establishments with higher store traffic are managed by a Republican-leaning CEO.
Keywords: CEO, Coronavirus, COVID-19, Political Donations, Political Partisanship, SARS-CoV-2, Shareholder Value, Social Distancing
JEL Classification: D21, D72, G14, G30, G38, H12, H75, I12, I18, M14, P16, P48
Suggested Citation: Suggested Citation