Strategic CEO Activism in Polarized Markets

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In this paper we show that statements of US CEOs on contentious social issues are not necessarily an expression of their political views. Republican-donor CEOs are three-times more likely to make social statements with a liberal-slant. CEO activism is more likely if firms' operating environment is politically polarized, and employees are Democrat-leaning. Such statements are associated with a 3% increase in consumer visits to a firm's Democrat county stores without significantly reducing them in Republican counties. CEO activism is associated with a 0.12% gain in firm value, increased quarterly sales, and a reduced likelihood of shareholder activism on social issues.




Homroy, S., & Gangopadhyay, S. (2023). Strategic CEO Activism in Polarized Markets. Journal of Financial and Quantitative Analysis.

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