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CEO Political Ideology and Voluntary Forward-Looking Disclosure

Published online by Cambridge University Press:  12 September 2023

Ahmed Elnahas ,
Lei Gao Open the ORCID record for Lei Gao [Opens in a new window] ,
Md Noman Hossain  and
Jeong-Bon Kim
Ahmed Elnahas
Affiliation:
The University of Texas Rio Grande Valley Robert C. Vackar College of Business and Entrepreneurship ahmed.elnahas@utrgv.edu
Lei Gao*
Affiliation:
George Mason University Costello College of Business
Md Noman Hossain
Affiliation:
Central Washington University College of Business mdnoman.hossain@cwu.edu
Jeong-Bon Kim
Affiliation:
Simon Fraser University Beedie School of Business and City University of Hong Kong College of Business jbk3@sfu.ca and cbjkim@cityu.edu.hk
*
lgao9@gmu.edu
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Abstract

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This study investigates whether the management earnings forecasts of Republican and Democratic CEOs differ due to systematic differences in their information disclosure preferences. We find that Republican CEOs prefer a less asymmetric information environment than Democrat CEOs, and thus make more frequent, timelier, and more accurate disclosures than Democrat CEOs. Results using the propensity score matched sample and difference-in-differences analysis show that our results are unlikely to be driven by potential endogeneity. Our results are robust to controlling for various CEO characteristics and are stronger for firms with higher levels of institutional ownership and litigation risk.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , First View , pp. 1 - 37
Creative Commons
Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

Footnotes

We would like to express our profound gratitude to Alok Kumar (the referee), Paul Malatesta (the editor), Long Chen, Zhenhua Chen, Nataliya Gerasimova, Jack He, Ghada Ismail, Siamak Javadi, Kose John, Mahsa Kaviani, Incheol Kim, Kelvin Liu, Andrew Schwartz, Marcos Velazquez, and conference participants at the 2022 American Finance Association Annual meetings, the 2020 Financial Management Association meetings, the 2020 Southern Finance Association annual meeting, the 2021 Eastern Finance Association Annual Meeting, the 2021 Southwestern Finance Association Annual Meeting, and seminar participants at Central University of Finance and Economics, George Mason University, and the University of Texas Rio Grande Valley for their invaluable constructive comments and suggestions.

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