The Political Polarization of Corporate America

Speaker: Elisabeth Kempf, Harvard Business School 

Abstract: Executives in U.S. firms are increasingly segregating by political party. We establish this new fact using political affiliations from voter registration records for top executives of S&P 1500 firms between 2008 and 2020. The new fact is explained by an increasing geographical segregation of partisan executives as well as by executive turnovers. Stock prices react negatively to announcements of departures by executives whose political affiliations are misaligned with those of their peers, suggesting investors interpret the news of a misaligned executive’s departure as a negative signal about the firm’s economic value.

Location: online or at Kiel Institute for the World Economy, Chausseestraße 111, 10115 Berlin

Organizers: Kiel Institute for the World Economy, CEPR

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