Political Ideology and Corporate Innovation: Evidence from the Expansion of a Local TV Network

Abstract

We investigate how political ideology affects corporate innovation by using the expansion of Sinclair Broadcasting, the largest conservative media network in the U.S., as a plausible shock to the local ideology. We find that innovation quantity (patent counts) and quality (citation counts per patent, originality, generality, the number of impactful patents, and the economic value of innovation) fall significantly upon the Sinclair entry to a local TV market. The effect is driven by the departure of innovative talent, and the decline in innovativenesss among the inventors who remain in the firms. These findings are important especially with the increasing political divide in the U.S., and the heightened polarization in the media environment.