The Value of Manager Partisanship

52 Pages Posted: 22 Feb 2021 Last revised: 9 Mar 2021

See all articles by Anqi Jiao

Anqi Jiao

Southwestern University of Finance and Economics - Institute of Financial Studies

Honglin Ren

Renmin University of China - School of Business

Date Written: March 9, 2021

Abstract

We investigate the role and value of manager partisanship to U.S. corporations. Using party-specific natural experiments, we find that firms gain greater abnormal returns when shocks favor political party with which firm managers align. We document that politicians are more likely to join firms as directors and personally invest in firms sharing similar partisan view, suggesting political similarity can foster preferential views. On the other hand, firms with manager partisanship leaning toward the political party of the U.S. president gain easier access to the White House, get more federal procurements, and receive less unfavorable regulatory actions. Our results suggest that manager partisanship affects how firms connect in the U.S. two-party politics and is of significant value to firms.

Keywords: manager partisanship, firm value, political similarity, polarization

JEL Classification: P16, G32

Suggested Citation

Jiao, Anqi and Ren, Honglin, The Value of Manager Partisanship (March 9, 2021). Available at SSRN: https://ssrn.com/abstract=3779811 or http://dx.doi.org/10.2139/ssrn.3779811

Anqi Jiao (Contact Author)

Southwestern University of Finance and Economics - Institute of Financial Studies ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Honglin Ren

Renmin University of China - School of Business ( email )

Beijing
China

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