The Political Polarization of U.S. Firms
51 Pages Posted: 18 Feb 2021 Last revised: 12 Nov 2021
Date Written: September 1, 2021
Executive teams in U.S. firms are becoming increasingly partisan, leading to a political polarization of corporate America. We establish this new fact using political affiliations from voter registration records for top executives of S&P 1500 firms between 2008 and 2018. The rise in partisanship is explained by both an increasing share of Republican executives and increased sorting by partisan executives into firms with like-minded individuals. Further, we find that within a given firm-year, executives whose political views do not match those of the team's majority have a higher probability of leaving the firm. The increase in partisanship is taking place despite executive teams becoming more diverse in terms of gender and race.
Keywords: political polarization, partisanship, executives, management teams, governance, diversity
JEL Classification: G30, G34, M12, M14
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