CEO Political Leanings and Store-Level Economic Activity during the COVID-19 Crisis: Effects on Shareholder Value and Public Health

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

Bizjak, John M. and Kalpathy, Swaminathan L. and Mihov, Vassil T. and Ren, Jue, CEO Political Leanings and Store-Level Economic Activity during the COVID-19 Crisis: Effects on Shareholder Value and Public Health (July 22, 2022). Journal of Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3674512 or http://dx.doi.org/10.2139/ssrn.3674512