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CEO Political Leanings and Store‐Level Economic Activity during the COVID‐19 Crisis: Effects on Shareholder Value and Public Health

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  • JOHN M. BIZJAK
  • SWAMINATHAN L. KALPATHY
  • VASSIL T. MIHOV
  • JUE REN

Abstract

Maintaining economic output during the COVID‐19 pandemic results in benefits for firm shareholders but comes at a potential cost to public health. Using store‐level data, we examine how a CEO's political leaning impacts this trade‐off. We document that firms with a Republican‐leaning CEO experience a relative increase in store visits compared to firms with a Democratic‐leaning CEO. The increase in store visits is associated with higher sales and positive abnormal stock returns. However, we also document higher COVID‐19 transmission rates and more employee safety complaints in communities where establishments with higher store traffic are managed by a Republican‐leaning CEO.

Suggested Citation

  • John M. Bizjak & Swaminathan L. Kalpathy & Vassil T. Mihov & Jue Ren, 2022. "CEO Political Leanings and Store‐Level Economic Activity during the COVID‐19 Crisis: Effects on Shareholder Value and Public Health," Journal of Finance, American Finance Association, vol. 77(5), pages 2949-2986, October.
    • Handle: RePEc:bla:jfinan:v:77:y:2022:i:5:p:2949-2986
    DOI: 10.1111/jofi.13173
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    References listed on IDEAS

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