CEO Political Ideology and Management Earnings Forecast

87 Pages Posted: 21 Jul 2020

See all articles by Md Noman Hossain

Md Noman Hossain

University of Texas Rio Grande Valley (UTRGV)

Ahmed Elnahas

University of Texas - Pan American - College of Business Administration - Department of Economics & Finance

Lei Gao

George Mason University

Date Written: June 28, 2020

Abstract

Republican CEOs are more likely to issue earnings forecasts and to issue forecasts that are more accurate and timely. Republican CEOs favor range and less optimistic forecasts, convey more negative news, and have more positive earnings surprises. We address endogeneity using propensity score matching and difference-in-difference estimates. Our results are robust to controlling for CEO characteristics, incentives, overconfidence, and managerial ability, and are stronger for firms with a high level of institutional ownership and litigation risk. The preference for threat and ambiguity avoidance of conservative CEOs seem to outweigh the tendency to seize on information associated with their authoritarian personalities.

Keywords: CEO Political Ideology; Earnings Forecasts; Conservatism

JEL Classification: D82, M41, P16.

Suggested Citation

Hossain, Md Noman and Elnahas, Ahmed and Gao, Lei, CEO Political Ideology and Management Earnings Forecast (June 28, 2020). Available at SSRN: https://ssrn.com/abstract=3637608 or http://dx.doi.org/10.2139/ssrn.3637608

Md Noman Hossain (Contact Author)

University of Texas Rio Grande Valley (UTRGV) ( email )

1201 W. University Drive
Edinburg, TX 78541
United States
4094540458 (Phone)
78541 (Fax)

Ahmed Elnahas

University of Texas - Pan American - College of Business Administration - Department of Economics & Finance ( email )

1201 W. University Drive
Edinburg, TX 78539-2999
United States

Lei Gao

George Mason University ( email )

Fairfax, VA 22030
United States

HOME PAGE: http://sites.google.com/view/lei-gao/home

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