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Corporate policies of republican managers
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Hutton, Irena, Jiang, Danling and Kumar, Alok (2015) Corporate policies of republican managers. Journal of Financial and Quantitative Analysis, 49 (5-6). pp. 1279-1310. doi:10.1017/S0022109014000702 ISSN 0022-1090.
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Official URL: http://dx.doi.org/10.1017/S0022109014000702
Abstract
We demonstrate that personal political preferences of corporate managers influence corporate policies. Specifically, Republican managers who are likely to have conservative personal ideologies adopt and maintain more conservative corporate policies. Those firms have lower levels of corporate debt, lower capital and research and development (R&D) expenditures, less risky investments, but higher profitability. Using the 9/11 terrorist attacks and Sept. 2008 Lehman Brothers bankruptcy as natural experiments, we demonstrate that investment policies of Republican managers became more conservative following these exogenous uncertainty-increasing events. Furthermore, around chief executive officer (CEO) turnovers, including CEO deaths, firm leverage policy becomes more conservative when managerial conservatism increases.
Item Type: | Journal Article | ||||||
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Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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Journal or Publication Title: | Journal of Financial and Quantitative Analysis | ||||||
Publisher: | Cambridge University Press | ||||||
ISSN: | 0022-1090 | ||||||
Official Date: | 8 April 2015 | ||||||
Dates: |
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Volume: | 49 | ||||||
Number: | 5-6 | ||||||
Page Range: | pp. 1279-1310 | ||||||
DOI: | 10.1017/S0022109014000702 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | Published | ||||||
Access rights to Published version: | Restricted or Subscription Access |
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