Abstract
This article examines whether managers’ political orientation, which reflects their risk preferences, is associated with firms’ stock price crash risk. We find that stock price crash risk is lower when corporate managers have more conservative political ideologies, and the results are robust to controls for other determinants of crash risk. We use Heckman two-stage model and employ difference-in-differences research design around executive turnovers to show that our results are not simply driven by potential endogeneity. We also document that the relation between managerial political orientation and stock price crash risk is stronger when external monitoring is weaker. JEL Classifications: G12; G14; M41.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
