Do Republican Managers Adopt Conservative Corporate Policies?

According to three economists, the answer is yes:

This paper examines whether the personal political ideology of managers influences corporate policies. Our key conjecture is that financially conservative Republican managers would adopt more conservative corporate policies than managers with Democratic orientation. Using individual-level political contributions of managers as a proxy for their political preferences, we show that managers self-select into firms and industries with political environment that is closely aligned with their own personal political values. Further, we show that firms with Republican managers have more conservative corporate policies. Specifically, Republican managers choose lower levels of corporate debt, lower levels of capital investments, lower R&D expenditures, and pay more dividends. Their cautious investment policies make firms less risky, generate higher profitability, and allow firms to retain more earnings, which in turn reduce corporate leverage. Conservative corporate and local cultures also induce conservative corporate policies, but the impact of managerial financial conservatism is the strongest.