{"id":3887,"date":"2024-12-11T03:20:54","date_gmt":"2024-12-11T03:20:54","guid":{"rendered":"https:\/\/www.tarleton.edu\/cob\/?p=3887"},"modified":"2026-02-26T20:21:35","modified_gmt":"2026-02-26T20:21:35","slug":"implications-of-ceo-characteristics-on-firm-policy-and-financial-performance-understanding-their-effects-on-business-and-research","status":"publish","type":"post","link":"https:\/\/www.tarleton.edu\/cob\/2024\/12\/11\/implications-of-ceo-characteristics-on-firm-policy-and-financial-performance-understanding-their-effects-on-business-and-research\/","title":{"rendered":"Implications of CEO characteristics on firm policy and financial performance: Understanding their effects on business and research"},"content":{"rendered":"\n<div class=\"wp-block-cover\"><img loading=\"lazy\" decoding=\"async\" width=\"354\" height=\"472\" class=\"wp-block-cover__image-background wp-image-3889\" alt=\"Portrait of a person with long dark hair, wearing a white shirt.\" src=\"https:\/\/www.tarleton.edu\/cob\/wp-content\/uploads\/sites\/103\/2024\/12\/1712703426594.jpg\" style=\"object-position:50% 32%\" data-object-fit=\"cover\" data-object-position=\"50% 32%\" srcset=\"https:\/\/www.tarleton.edu\/cob\/wp-content\/uploads\/sites\/103\/2024\/12\/1712703426594.jpg 354w, https:\/\/www.tarleton.edu\/cob\/wp-content\/uploads\/sites\/103\/2024\/12\/1712703426594-225x300.jpg 225w, https:\/\/www.tarleton.edu\/cob\/wp-content\/uploads\/sites\/103\/2024\/12\/1712703426594-300x400.jpg 300w\" sizes=\"auto, (max-width: 354px) 100vw, 354px\" \/><span aria-hidden=\"true\" class=\"wp-block-cover__background has-background-dim\"><\/span><div class=\"wp-block-cover__inner-container is-layout-flow wp-block-cover-is-layout-flow\">\n<p class=\"has-text-align-center has-large-font-size\"><\/p>\n<\/div><\/div>\n\n\n\n<figure class=\"wp-block-audio\"><audio controls src=\"https:\/\/www.tarleton.edu\/cob\/wp-content\/uploads\/sites\/103\/2024\/12\/CEO-Political-Ideology-and-Firm-Cost-Asymmetry.wav\"><\/audio><figcaption class=\"wp-element-caption\">Esplin, A., Key, Y., Olsen, K, and Seo, J. (2024), &#8220;CEO Political Ideology and Asymmetric Cost Behavior&#8221;, <em>Advances in Accounting<\/em>, <a href=\"https:\/\/doi.org\/10.1016\/j.adiac.2024.100755\">https:\/\/doi.org\/10.1016\/j.adiac.2024.100755<\/a><\/figcaption><\/figure>\n\n\n\n<p id=\"ember502\">In recent years, there has been a growing interest in examining how CEOs&#8217; characteristics shape their companies. One area of focus has been the impact of CEO political ideology on decision-making and financial management. Political ideology refers to an individual&#8217;s attitudes and values that are partially influenced by their personality traits. It is an important concept as it helps to explain why people behave the way they do. The political ideology of people and CEOs has been found to influence workplace behavior and corporate policies. This study investigates how CEO political ideology influences their company\u2019s resource allocation in response to changes in sales.<\/p>\n\n\n\n<p id=\"ember503\"><strong>Understanding the Influence of CEO Political Ideology<\/strong><\/p>\n\n\n\n<p id=\"ember504\">The business world is constantly changing, and external factors such as political beliefs can have a significant impact on how companies operate. However, it is not well understood how CEO political ideology affects their companies&#8217; resource management and cost control. To address this gap, this study has two main objectives: first, to examine how CEO political ideology influences the decisions made regarding resource management, and second, to explore the consequences of these decisions on a company&#8217;s financial performance and its ability to create long-term value.<\/p>\n\n\n\n<p id=\"ember505\"><strong>Research Methodology<\/strong><\/p>\n\n\n\n<p id=\"ember506\">Our research methodology includes analyzing a broad dataset of firm-specific details. This information includes the political affiliations of CEOs, strategies for resource adjustment, and financial performance metrics. To determine the political ideology of CEOs, we use data on their political contributions to Republican and Democratic candidates and party committees in political campaigns. We employ robust statistical techniques to identify patterns and relationships between CEO political ideology and firm-level outcomes.<\/p>\n\n\n\n<p id=\"ember507\"><strong>Key Findings of the Paper<\/strong><\/p>\n\n\n\n<p id=\"ember508\">One of the key findings of this study is how companies handle costs when there are changes in sales. When firms make resource adjustments in response to revenue increases and decreases, this can give rise to asymmetric cost behavior, also known as \u201csticky costs.\u201d Our findings indicate that companies led by Republican CEOs tend to be more conservative in their cost management, maintaining costs even during sales declines. In contrast, companies with Democratic CEOs show more flexibility, adjusting costs more in response to sales changes. This conservative approach of Republican CEOs is in line with the traditional beliefs often associated with Republican ideologies. Although resource adjustment decisions may come with higher short-term costs, they tend to generate greater value in the long run.<\/p>\n\n\n\n<p id=\"ember509\"><strong>Implications for Business Leaders and Researchers<\/strong><\/p>\n\n\n\n<p id=\"ember510\">This research has practical implications for business professionals, offering insights into how political ideology can impact business operations. It also provides valuable learning opportunities for students, demonstrating how external factors such as political ideology can influence internal business decisions. Academic researchers find this study intriguing because it combines various disciplines such as accounting and management, providing new avenues for understanding the intersection of personal beliefs and business outcomes.<\/p>\n\n\n\n<p id=\"ember511\">In conclusion, this study highlights how CEO political ideology can influence a company&#8217;s financial decisions. This understanding is essential for business leaders seeking to navigate the impact of personal beliefs on organizational strategies and performance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"ember515\">Dr. Jiwoo&nbsp;Seo<\/h3>\n\n\n\n<p id=\"ember516\"><em>Assistant Professor<\/em> Office: <strong>Business Building, Room 127<\/strong> Phone: <strong>254-968-9334<\/strong> Email: <a href=\"mailto:jseo@tarleton.edu\"><strong>jseo@tarleton.edu<\/strong><\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This study examines how CEO political ideology influences cost stickiness, showing that conservative executives are less likely to maintain excess costs during revenue declines.<\/p>\n","protected":false},"author":68,"featured_media":580,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","wds_primary_category":33,"footnotes":""},"categories":[33],"tags":[155,149,150,156,153,43,151,154,157,152],"class_list":["post-3887","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-intellectual-contributions","tag-accounting-research","tag-asymmetric-cost-behavior","tag-ceo-characteristics","tag-corporate-governance","tag-cost-management","tag-cost-stickiness","tag-executive-political-ideology","tag-financial-reporting","tag-firm-behavior","tag-managerial-discretion"],"acf":[],"author_meta":{"display_name":"mhancock","author_link":"https:\/\/www.tarleton.edu\/cob\/author\/mhancock-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2\/"},"featured_img":null,"coauthors":[],"tax_additional":{"categories":{"linked":["<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">Intellectual Contributions<\/a>"],"unlinked":["<span class=\"advgb-post-tax-term\">Intellectual Contributions<\/span>"]},"tags":{"linked":["<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">accounting research<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">asymmetric cost behavior<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">CEO characteristics<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">corporate governance<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">cost management<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">Cost Stickiness<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">executive political ideology<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">financial reporting<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">firm behavior<\/a>","<a href=\"https:\/\/www.tarleton.edu\/cob\/category\/intellectual-contributions\/\" class=\"advgb-post-tax-term\">managerial discretion<\/a>"],"unlinked":["<span class=\"advgb-post-tax-term\">accounting research<\/span>","<span class=\"advgb-post-tax-term\">asymmetric cost behavior<\/span>","<span class=\"advgb-post-tax-term\">CEO characteristics<\/span>","<span class=\"advgb-post-tax-term\">corporate governance<\/span>","<span class=\"advgb-post-tax-term\">cost management<\/span>","<span class=\"advgb-post-tax-term\">Cost Stickiness<\/span>","<span class=\"advgb-post-tax-term\">executive political ideology<\/span>","<span class=\"advgb-post-tax-term\">financial reporting<\/span>","<span class=\"advgb-post-tax-term\">firm behavior<\/span>","<span class=\"advgb-post-tax-term\">managerial discretion<\/span>"]}},"comment_count":0,"relative_dates":{"created":"Posted 1 year ago","modified":"Updated 2 months ago"},"absolute_dates":{"created":"Posted on December 11, 2024","modified":"Updated on February 26, 2026"},"absolute_dates_time":{"created":"Posted on December 11, 2024 3:20 am","modified":"Updated on February 26, 2026 8:21 pm"},"featured_img_caption":"","series_order":"","_links":{"self":[{"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/posts\/3887","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/users\/68"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/comments?post=3887"}],"version-history":[{"count":4,"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/posts\/3887\/revisions"}],"predecessor-version":[{"id":5115,"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/posts\/3887\/revisions\/5115"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/media?parent=3887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/categories?post=3887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tarleton.edu\/cob\/wp-json\/wp\/v2\/tags?post=3887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}