Political Ideology and CEO Performance Under Crisis

Campbell, K., Goenner, C.F., Notbohm, M., Smedema, A.R. (Forthcoming) Political Ideology and CEO Performance Under Crisis. Review of Quantitative Finance and Accounting

49 Pages Posted: 8 Jul 2021

See all articles by Katherine Campbell

Katherine Campbell

University of Maryland

Cullen F. Goenner

University of North Dakota - Department of Economics and Finance

Matthew Notbohm

University of North Dakota

Adam R Smedema

University of Northern Iowa

Date Written: June 9, 2021

Abstract

Management quality is known to influence depository institution performance, but less understood are the characteristics of managers that influence performance. We empirically examine how the political ideology of a credit union’s CEO influenced decision making and performance during the financial crisis. Our results indicate that the return on assets of credit unions run by conservative CEOs are 22 basis points lower during the crisis relative to liberal CEOs. Returns are shown to be lower as a direct result of credit unions with conservative CEOs applying more conservative accounting practices for loan losses than their counterparts during the crisis, despite similar loan quality

Keywords: Credit unions, accounting practices, performance, conservatism, financial crisis

JEL Classification: G21, G28

Suggested Citation

Campbell, Katherine and Goenner, Cullen F. and Notbohm, Matthew and Smedema, Adam R, Political Ideology and CEO Performance Under Crisis (June 9, 2021). Campbell, K., Goenner, C.F., Notbohm, M., Smedema, A.R. (Forthcoming) Political Ideology and CEO Performance Under Crisis. Review of Quantitative Finance and Accounting, Available at SSRN: https://ssrn.com/abstract=3873997

Katherine Campbell

University of Maryland ( email )

College of Business & Management
Smith School, Rm. 4457
College Park, MD 20742-9157
United States
301-405-5481 (Phone)

Cullen F. Goenner (Contact Author)

University of North Dakota - Department of Economics and Finance ( email )

3125 University Ave Stop 8369
Grand Forks, ND 58202
United States

HOME PAGE: http://www.ndeconomist.com

Matthew Notbohm

University of North Dakota ( email )

Box 8366
Grand Forks, ND 58202
United States

Adam R Smedema

University of Northern Iowa ( email )

Cedar Falls, IA 50614
United States

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