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Political ideology and CEO performance under crisis

Author

Listed:
  • Katherine Campbell

    (University of North Dakota)

  • Cullen F. Goenner

    (University of North Dakota)

  • Matthew Notbohm

    (University of North Dakota)

  • Adam Smedema

    (University of Wisconsin – Madison)

Abstract

Management quality is known to influence depository institution performance, but less understood are the characteristics of managers that influence performance. We empirically examine how the political ideology of a credit union’s CEO influenced decision making and performance during the financial crisis. Our results indicate that the return on assets of credit unions run by conservative CEOs are 22 basis points lower during the crisis relative to liberal CEOs. Returns are shown to be lower as a direct result of credit unions with conservative CEOs applying more conservative accounting practices for loan losses than their counterparts during the crisis, despite similar loan quality.

Suggested Citation

  • Katherine Campbell & Cullen F. Goenner & Matthew Notbohm & Adam Smedema, 2022. "Political ideology and CEO performance under crisis," Review of Quantitative Finance and Accounting, Springer, vol. 58(1), pages 329-359, January.
    • Handle: RePEc:kap:rqfnac:v:58:y:2022:i:1:d:10.1007_s11156-021-00996-z
    DOI: 10.1007/s11156-021-00996-z
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    References listed on IDEAS

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    More about this item

    Keywords

    Credit unions; Accounting practices; Performance; Conservatism; Financial crisis;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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