Working Paper: NBER ID: w25815
Authors: Alma Cohen; Moshe Hazan; Roberto Tallarita; David Weiss
Abstract: CEOs of public companies have influence over the political spending of their firms, which has been attracting significant attention since the Supreme Court decision in Citizens United. Furthermore, the policy views expressed by CEOs receive substantial consideration from policymakers and the public. The political preferences of CEOs, we argue, are therefore important for a full understanding of U.S. policymaking and politics. To contribute to this understanding, we provide empirical evidence on the partisan leanings of public-company CEOs.\nWe use Federal Election Commission (FEC) records to put together a comprehensive database of the political contributions made by over 3,500 individuals who served as CEOs of S&P 1500 companies during the period 2000-2017. We find that these political contributions display substantial partisan preferences in support of Republican candidates. We identify how this pattern is related to the company’s industry, geographical region, and CEO gender. To highlight the significance of CEO’s partisan preferences for some corporate decisions, we show that public companies led by Republican CEOs tend to be less transparent to investors with respect to their political spending. We conclude by discussing the potential policy implications of our analysis.
Keywords: CEOs; Political Contributions; Corporate Governance; Political Spending
JEL Codes: G3; G34; K2; K22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| CEO political preferences (M12) | corporate political spending (G38) |
| CEO political preferences (M12) | corporate political spending disclosures (G38) |
| Republican CEOs (M12) | corporate political spending transparency (G38) |
| CEO political preferences (M12) | corporate asset value (G32) |
| political contributions of CEOs (M12) | partisan preferences (D72) |